Location: Lee County, IA | Metro: Henry 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 | $760 |
| 2 Bedrooms | $1,000 |
| 3 Bedrooms | $1,310 |
| 4 Bedrooms | $1,330 |
| 5 Bedrooms | $1,543 |
| 6 Bedrooms | $1,728 |
| 7 Bedrooms | $1,866 |
| 8 Bedrooms | $1,959 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,310 | $229,337 | 0.57% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 52649 provides insight into potential investment opportunities for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a two-bedroom apartment in this area, based on FY 2026 data, is set at $950 per month. Meanwhile, the Census ACS indicates a market rent of $850 per month for similar units.
To determine the gross yield, we annualize these figures and compare them to the median home value of $216,078. For the FMR scenario, the annualized rental income is $11,400 ($950 x 12 months), resulting in a gross yield of approximately 5.27%. This is calculated by dividing the annual rental income by the median home value: $11,400 / $216,078 = 0.0527 or 5.27%. For the market rent scenario, the annualized rental income drops to $10,200 ($850 x 12 months), leading to a gross yield of about 4.72%. This is derived from $10,200 / $216,078 = 0.0472 or 4.72%.
Given the 8.8% renter density in ZIP 52649, it's important to note that the market rent scenario appears more realistic. A lower renter density suggests a smaller pool of potential tenants, making it challenging to secure higher rents consistently. Additionally, the lack of data on days on market (DOM) indicates a possible difficulty in quickly leasing properties, further supporting the market rent figure as a more practical benchmark.
In conclusion, while the FMR of $950 offers a gross yield of 5.27%, the market rent of $850, providing a gross yield of 4.72%, aligns better with the local rental environment. Investors should consider these figures when evaluating the potential returns of properties in ZIP 52649 under Section 8 programs.
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.