Location: Milwaukee-Waukesha, WI | Metro: Milwaukee-Waukesha, WI MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,150 |
| 1 Bedroom | $1,230 |
| 2 Bedrooms | $1,470 |
| 3 Bedrooms | $1,810 |
| 4 Bedrooms | $1,940 |
| 5 Bedrooms | $2,250 |
| 6 Bedrooms | $2,520 |
| 7 Bedrooms | $2,722 |
| 8 Bedrooms | $2,858 |
The analysis of the Section 8 cap-rate picture for ZIP code 53064 in Unknown, Wisconsin, reveals some limitations due to incomplete data. The Fair Market Rent (FMR) for a two-bedroom apartment in fiscal year 2024 is set at an annualized rate of $1360. However, the market rent for the area is not available, as well as the median home value. This makes it challenging to provide a comprehensive cap-rate calculation.
To derive the implied gross yield, we need to consider the rental income relative to the property value. In the case of using the FMR of $1360, without knowing the median home value, we cannot calculate a precise cap-rate. But let's assume a hypothetical median home value for the sake of illustration. If the median home value were, for example, $136,000, the gross yield would be approximately 1%, which is calculated by dividing the annual rent by the median home value ($1360 / $136,000).
In the absence of market rent data, it is impossible to provide an accurate comparison between the FMR-based gross yield and the potential market rent-based gross yield. Typically, market rents can be higher than FMRs, leading to a potentially better gross yield for market rent scenarios. However, since the exact market rent is not provided, this comparison remains speculative.
The lack of specific data on renter density and days on market (DOM) further complicates the analysis. Renter density, expressed as a percentage, indicates how many residents are renting versus owning homes, which is crucial for understanding the demand for rental properties. Days on market refers to the average number of days a property stays listed before being rented, providing insight into the speed of occupancy. Without these figures, it is difficult to assess the practicality of the gross yields derived from the FMR and market rent scenarios.
Given the limited data, the scenario based on the FMR of $1360 offers a conservative estimate of the gross yield. A more realistic assessment would require actual market rent data and a clearer picture of the local real estate market dynamics, including renter density and DOM. Landlords and small-portfolio investors should seek out additional local market data to refine their investment decisions.
Data Sources: FMR data from HUD (2027).
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.