Location: Walworth County, WI | Metro: Kenosha, WI MSA
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 | $980 |
| 1 Bedroom | $1,050 |
| 2 Bedrooms | $1,320 |
| 3 Bedrooms | $1,710 |
| 4 Bedrooms | $2,060 |
| 5 Bedrooms | $2,390 |
| 6 Bedrooms | $2,677 |
| 7 Bedrooms | $2,891 |
| 8 Bedrooms | $3,036 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,320 | $283,264 | 0.47% | F |
| 3BR | $1,710 | $394,872 | 0.43% | F |
| 4BR | $2,060 | $471,695 | 0.44% | F |
| 5BR | $2,390 | $540,085 | 0.44% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 53105 in Burlington, WI, provides a clear view of the financial landscape for potential investors. To derive the gross yield, we must first calculate the annual rental income based on the Fair Market Rent (FMR) and the market rent for a two-bedroom property.
The annualized FMR for a two-bedroom property in ZIP 53105 is $1130 per month, equating to an annual rental income of $13,560. The median home value in this area is $387,418. Using these figures, the implied gross yield for a Section 8 property is approximately 3.5%. This calculation is derived by dividing the annual rental income ($13,560) by the median home value ($387,418).
In contrast, the Census ACS reports a market rent of $1,079 per month for a two-bedroom property, resulting in an annual rental income of $12,948. Applying the same median home value of $387,418, the implied gross yield for a market-rate rental property is about 3.3%. This calculation is achieved by dividing the annual rental income ($12,948) by the median home value ($387,418).
The higher gross yield for Section 8 properties compared to market-rate rentals suggests that participating in the Section 8 program could be more financially beneficial for landlords and small-portfolio investors. However, the decision should also consider other factors such as the percentage of renters in the area and the typical days on market (DOM) for properties.
Burlington, WI, has a renter density of 24.7%, indicating a relatively low proportion of residents who are likely to apply for Section 8 housing. Given the N/A-day DOM, it's unclear how quickly Section 8 properties are typically leased. This uncertainty can affect the feasibility of relying solely on Section 8 tenants for a steady income stream.
While the gross yield for Section 8 properties is slightly higher at 3.5% compared to the market-rate yield of 3.3%, the lower renter density and unknown DOM suggest that market-rate rentals might be more stable and less dependent on government subsidies. Investors should weigh the benefits of higher yields against the risks of lower tenant demand and potential delays in leasing.
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.