Location: Iowa City, IA | Metro: Iowa City, IA HUD Metro FMR Area
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $960 |
| 1 Bedroom | $1,020 |
| 2 Bedrooms | $1,200 |
| 3 Bedrooms | $1,660 |
| 4 Bedrooms | $2,010 |
| 5 Bedrooms | $2,332 |
| 6 Bedrooms | $2,612 |
| 7 Bedrooms | $2,821 |
| 8 Bedrooms | $2,962 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,020 | $149,877 | 0.68% | D |
| 2BR | $1,200 | $181,657 | 0.66% | D |
| 3BR | $1,660 | $309,565 | 0.54% | F |
| 4BR | $2,010 | $437,505 | 0.46% | F |
| 5BR | $2,332 | $569,058 | 0.41% | F |
U.S. Census Bureau data (2024)
The potential risks for a Section 8 landlord investing in ZIP code 52246 in Iowa City, IA, are significant. First, tenant turnover poses a substantial challenge due to the difference between the market rent of $1,359 and the Fair Market Rent (FMR) for FY 2024, which is $1,080. This gap suggests that tenants might struggle to find alternative housing at the market rate, leading to frequent moves and increased vacancy periods.
Vacancy exposure is another critical issue. With an average Days on Market (DOM) of 44 days, landlords face a period where properties are unoccupied and not generating income. This is especially problematic when considering the deferred maintenance exposure. The typical home value in the area is $291,264, while the median household income stands at $62,521. These figures indicate that many residents may have limited financial resources to cover unexpected maintenance costs, potentially leaving landlords responsible for costly repairs.
However, these risks must be weighed against the high concentration of renters in the area. The renter share of 54.8% points towards a robust demand for rental properties, including those that accept Section 8 vouchers. High renter density generally translates into a larger pool of potential voucher holders, increasing the likelihood of finding stable, long-term tenants who can reliably pay their rent through the voucher program.
In conclusion, despite the challenges posed by tenant turnover, vacancy exposure, and deferred maintenance, the high renter density in ZIP 52246 makes it a moderate risk for a first-time Section 8 landlord. While there are notable obstacles, the strong rental market provides a counterbalance that can mitigate some of these risks.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.