Location: Milwaukee-Waukesha, WI | Metro: Milwaukee-Waukesha, WI MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,140 |
| 1 Bedroom | $1,230 |
| 2 Bedrooms | $1,470 |
| 3 Bedrooms | $1,810 |
| 4 Bedrooms | $1,930 |
| 5 Bedrooms | $2,239 |
| 6 Bedrooms | $2,508 |
| 7 Bedrooms | $2,709 |
| 8 Bedrooms | $2,844 |
U.S. Census Bureau data (2024)
A decision tree for evaluating whether to purchase properties in ZIP code 53069 for Section 8 investment starts with three key questions.
1. Does the Fair Market Rent (FMR) of $1370 cover the debt service on a $734,954 property?
If yes, proceed to the next question. To determine this, calculate the monthly debt service (including principal, interest, taxes, and insurance) for a property costing $734,954. If the total monthly cost is less than $1370, then the FMR does indeed cover the debt service. This is a critical first step because without covering the debt service, the investment would be unprofitable.
If no, do not invest in this ZIP code. The FMR of $1370 is insufficient to cover the monthly debt service on a property valued at $734,954, making it an unwise financial decision.
2. Is the market rent above, at, or below the FMR of $1370?
If market rent is above $1370, then it is a positive sign but still depends on the demand for rental properties. Higher market rents suggest that there might be opportunities to charge more than the FMR for non-Section 8 tenants.
If market rent is at or below $1370, proceed to evaluate the demand. Market rent being equal to or lower than the FMR indicates that the rental income from Section 8 will match or exceed what could be earned from market-rate tenants.
3. Are the 10.8% of renters combined with the N/A days on the market (DOM) sufficient to meet demand?
If the percentage of renters is high and DOM is low, then there is strong demand for rental properties in this area. A low DOM means that properties are rented quickly, which is beneficial for turnover and occupancy rates.
If the percentage of renters is low and DOM is high, then demand is weak, and it might be difficult to find tenants, even if you are willing to accept Section 8 vouchers. In such a case, investing in this ZIP code is not advisable.
If the percentage of renters is moderate (like 10.8%) and DOM is not specified, it depends on other factors such as the local job market, school quality, and overall economic conditions. Without a specific DOM figure, one must consider the broader context of the ZIP code's attractiveness to potential tenants.
In summary, the decision to invest in ZIP 53069 hinges on the ability of the FMR to cover debt service, the comparison between market rent and FMR, and the strength of demand for rental properties. With the given data, if the FMR exceeds debt service and market rent is either at or below FMR, and demand is strong, then the answer is yes. Otherwise, it is no or it depends on additional factors not covered here.
Data Sources: FMR data from HUD (2027). 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.