Location: Benton County, IA | Metro: Cedar Rapids, 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 | $990 |
| 1 Bedroom | $1,090 |
| 2 Bedrooms | $1,410 |
| 3 Bedrooms | $1,920 |
| 4 Bedrooms | $2,250 |
| 5 Bedrooms | $2,610 |
| 6 Bedrooms | $2,923 |
| 7 Bedrooms | $3,157 |
| 8 Bedrooms | $3,315 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,920 | $332,188 | 0.58% | F |
| 4BR | $2,250 | $358,247 | 0.63% | D |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 52351 reveals two distinct possibilities based on available data.
In the first scenario, using the annualized Fair Market Rent (FMR) for a 2-bedroom unit at $860 per month, the annual rental income would be $10,320. Given the median home value of $331,563, the implied gross yield can be calculated as follows:
To find the gross yield, divide the annual rental income by the property value: $10,320 / $331,563 = 0.0311, or 3.11%. This suggests that if a landlord were to purchase a home at the median value and lease it under Section 8 terms, the gross yield would be approximately 3.11%.
In the second scenario, where the market rent is not available, we cannot directly calculate a gross yield. However, we can infer that market rents typically exceed FMRs set by HUD. Therefore, a market rent would likely provide a higher gross yield than the 3.11% derived from the Section 8 scenario.
Given the renter density of 7.7%, it's important to note that the demand for rental properties, including those under Section 8, may be lower compared to areas with higher renter populations. This implies that landlords might face challenges in filling vacancies, particularly if they rely solely on Section 8 tenants.
The absence of data regarding the Days on Market (DOM) makes it difficult to assess how quickly properties in this area are rented out. However, a higher DOM could indicate slower rental rates, which would negatively impact cash flow and investment returns.
Conclusion: The 3.11% gross yield from the Section 8 scenario is the most concrete figure we have. While market rents would likely offer a better gross yield, the limited demand for rentals and potential longer vacancy periods suggest that relying on Section 8 alone may result in a conservative investment strategy. Landlords should consider these factors when evaluating potential investments in ZIP code 52351.
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.