Location: Shelby County, IA | Metro: Audubon County, IA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $930 |
| 1 Bedroom | $1,150 |
| 2 Bedrooms | $1,250 |
| 3 Bedrooms | $1,670 |
| 4 Bedrooms | $2,050 |
| 5 Bedrooms | $2,378 |
| 6 Bedrooms | $2,663 |
| 7 Bedrooms | $2,876 |
| 8 Bedrooms | $3,020 |
U.S. Census Bureau data (2024)
When considering whether to purchase a property in ZIP code 51543 for Section 8 investment, follow this decision tree:
Step 1: Does the Fair Market Rent (FMR) of $1,240 cover the debt service on a property valued at $129,950?
Yes. The FMR is designed to ensure that rental income meets or exceeds the debt service, making the property financially viable under Section 8. This means the landlord can expect to break even or make a profit without relying solely on rental income.
No. If the FMR does not cover the debt service, purchasing a property in this area would be risky. Landlords must ensure that their rental income is sufficient to meet all financial obligations associated with the property.
It Depends. This scenario is unlikely given the straightforward nature of the question. However, if there are unique circumstances affecting the debt service, such as unusually high interest rates or property taxes, then further analysis is required to determine the viability.
Step 2: How does the market rent of $1,069 compare to the FMR?
Above FMR. If the market rent is higher than the FMR, landlords can potentially charge higher rents to non-Section 8 tenants, thereby increasing their overall profitability. This suggests a healthy local rental market with opportunities beyond Section 8.
At FMR. When market rent equals the FMR, landlords can still participate in the Section 8 program without losing out on potential higher rents. This balance indicates a stable rental market.
Below FMR. If the market rent is below the FMR, landlords may find it challenging to compete with Section 8 rates. This could indicate an oversupply of affordable housing or a weak rental market, which might discourage investment.
Step 3: Do the 18.2% of renters combined with the unknown days on market (DOM) represent sufficient demand?
Yes. An 18.2% rental rate implies a moderate demand for rental properties. While the DOM is not available, the percentage of renters suggests that there are enough tenants to fill vacancies promptly, ensuring steady cash flow.
No. If the DOM is excessively high, indicating long periods before a property is rented, this would suggest low demand. High DOM coupled with a lower rental rate would make the property less attractive for Section 8 investment.
It Depends. Without the DOM data, it's challenging to assess how quickly properties are rented. However, if other factors like employment stability and population growth are positive, the 18.2% rental rate might still support a reasonable demand for Section 8 properties.
Based on the FMR covering the debt service and the market rent being below the FMR, landlords should proceed cautiously. The moderate rental rate of 18.2% offers some assurance but requires additional investigation into the DOM and broader economic conditions to make 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.