Location: Appanoose County, IA | Metro: Appanoose 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 | $690 |
| 1 Bedroom | $710 |
| 2 Bedrooms | $930 |
| 3 Bedrooms | $1,100 |
| 4 Bedrooms | $1,300 |
| 5 Bedrooms | $1,508 |
| 6 Bedrooms | $1,689 |
| 7 Bedrooms | $1,824 |
| 8 Bedrooms | $1,915 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $930 | $116,946 | 0.8% | D |
| 3BR | $1,100 | $169,203 | 0.65% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 52574, Mystic, IA, reveals some interesting insights. To begin, we'll consider the Fair Market Rent (FMR) for a two-bedroom apartment, which is set at $1,010 annually for Fiscal Year 2026, based on metropolitan standards. This figure represents the government's benchmark for rental subsidies.
In contrast, the Census ACS indicates that the market rent for a similar unit stands at $550 per month. When annualized, this equates to $6,600, significantly higher than the FMR. The median home value in Mystic is $57,156, providing a baseline for property valuation.
First, let's calculate the implied gross yield using the FMR. At an annual rent of $1,010, the gross yield would be approximately 1.77%. This is calculated by dividing the annual rent by the median home value: $1,010 / $57,156 = 0.0177 or 1.77%. Given the low renter density of 17.8%, it becomes clear that relying solely on Section 8 rents would result in a very modest income stream.
Next, considering the market rent scenario, the gross yield jumps to around 11.55%. This is derived from $6,600 / $57,156 = 0.1155 or 11.55%. This higher yield reflects the potential income landlords could achieve if they were able to charge market rates rather than accepting Section 8 subsidies.
The disparity between these yields highlights the financial reality faced by landlords in Mystic who choose to participate in the Section 8 program. The 1.77% gross yield under the FMR scenario is considerably lower than what could be achieved at market rates, suggesting that participation in Section 8 may not be financially optimal for most landlords unless they are looking for stable, long-term tenants or have other strategic reasons for doing so.
The N/A-day Days on Market (DOM) suggests either a very efficient local real estate market or incomplete data, making it difficult to assess the typical time frame for renting out properties. However, given the low renter density, landlords should be prepared for longer periods to secure tenants, especially if they are targeting those eligible for Section 8 assistance.
In conclusion, while the FMR-based gross yield of 1.77% offers a conservative outlook, the market rent scenario provides a much more robust 11.55% yield. For small-portfolio investors and landlords, the decision to accept Section 8 tenants must weigh the benefits of guaranteed rental payments against the significantly lower income potential compared to market rates.
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.