Location: Sac County, IA | Metro: Ida County, IA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $710 |
| 1 Bedroom | $840 |
| 2 Bedrooms | $930 |
| 3 Bedrooms | $1,160 |
| 4 Bedrooms | $1,220 |
| 5 Bedrooms | $1,415 |
| 6 Bedrooms | $1,585 |
| 7 Bedrooms | $1,712 |
| 8 Bedrooms | $1,798 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 51431 presents a unique set of challenges due to the lack of available data on median home values and days on market (DOM). However, we can still derive some useful insights from the figures provided.
The Fair Market Rent (FMR) for a two-bedroom apartment in ZIP 51431 for fiscal year 2026 is set at $920 annually. This translates into a monthly rental amount of approximately $76.67. Given that the market rent for a similar unit is reported at $676 annually (or roughly $56.33 per month), there is a significant difference between the two figures, which directly impacts the potential gross yield for an investment property under Section 8 versus market conditions.
In the case of Section 8, assuming a property's value is based on the annual rental income, we can infer a gross yield by dividing the annual rental income by the property's value. Since the median home value is not provided, we cannot calculate an exact cap rate. However, if we hypothetically assume a property value, the gross yield would be lower due to the lower rental income received from Section 8 tenants compared to market rates. For instance, if a property were valued at $100,000, the implied gross yield from Section 8 would be around 9.2%, while the market rent scenario would imply a gross yield of approximately 6.8%.
The renter density in ZIP 51431 is 33.7%, which suggests that a third of the households are renters. This statistic provides context for the demand for rental properties, including those that might participate in the Section 8 program. The lack of data on the average DOM indicates that it is difficult to assess how quickly properties are rented out under either scenario, which is a critical factor for investors considering cash flow and vacancy risks.
Given the higher implied gross yield from the Section 8 scenario, it appears more favorable for investors seeking immediate rental income. However, the decision should also consider factors such as the stability of government subsidies, the administrative overhead of participating in the Section 8 program, and the potential for longer-term appreciation of the property's value. While the market rent scenario offers a lower gross yield, it may provide greater flexibility and potentially higher long-term returns.
To conclude, the higher gross yield under the Section 8 scenario makes it a more attractive option for immediate rental income, especially considering the moderate renter density. However, investors should weigh this against the limitations and considerations of the Section 8 program before making a final decision.
Data Sources: FMR data from HUD (2027). Demographics from U.S. Census (2024).
About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.