Location: Wapello County, IA | Metro: Keokuk County, IA
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 | $800 |
| 1 Bedroom | $830 |
| 2 Bedrooms | $1,080 |
| 3 Bedrooms | $1,410 |
| 4 Bedrooms | $1,420 |
| 5 Bedrooms | $1,647 |
| 6 Bedrooms | $1,845 |
| 7 Bedrooms | $1,993 |
| 8 Bedrooms | $2,093 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $830 | $58,987 | 1.41% | A |
| 2BR | $1,080 | $95,642 | 1.13% | B |
| 3BR | $1,410 | $156,337 | 0.9% | C |
| 4BR | $1,420 | $196,884 | 0.72% | D |
| 5BR | $1,647 | $260,507 | 0.63% | D |
U.S. Census Bureau data (2024)
ZIP 52501, located in Ottumwa, IA, and part of the Wapello County, IA metro area, serves as an ideal appreciation play within a Section 8 portfolio strategy. The market dynamics in this region present a unique opportunity for long-term growth.
The Federal Market Rent (FMR) for the metro area in fiscal year 2026 is set at $1,070. This figure represents the maximum allowable rent for a unit under the Section 8 program. In contrast, the current market rent stands at $926, indicating a significant gap where landlords can operate below the FMR threshold without sacrificing occupancy rates. This spread allows for competitive pricing while ensuring compliance with Section 8 guidelines.
A key indicator of potential appreciation is the low price-cut share of 0.2%, suggesting that properties in this ZIP code are holding their value well. Additionally, the median home value of $121,516 is relatively stable, which further supports the notion that this area is poised for gradual value appreciation. While the days on market (DOM) data is not available, the low price-cut share implies that homes are selling at or near their asking prices, a positive sign for property value stability.
The ZIP code also has a renter share of 34.1%, which means a considerable portion of the population relies on rental housing. This demand for rentals ensures steady occupancy rates, crucial for maintaining consistent cash flow. However, given the median income of $63,426, there's a need for affordable housing options, making Section 8 properties particularly attractive to tenants.
Despite being a strong appreciation play, it's important to note that ZIP 52501 can also serve as a diversifier within a broader investment portfolio. The mix of stable home values and a substantial renter base provides a balanced approach to risk management, allowing investors to mitigate potential losses in other markets.
In summary, ZIP 52501 offers a compelling appreciation play due to its favorable market conditions and the alignment of Section 8 rents with the local market. This makes it a strategic addition to any Section 8 portfolio aimed at long-term capital appreciation.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.