Location: Milwaukee-Waukesha, WI | Metro: Milwaukee-Waukesha, 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 | $970 |
| 1 Bedroom | $1,040 |
| 2 Bedrooms | $1,240 |
| 3 Bedrooms | $1,520 |
| 4 Bedrooms | $1,630 |
| 5 Bedrooms | $1,891 |
| 6 Bedrooms | $2,118 |
| 7 Bedrooms | $2,287 |
| 8 Bedrooms | $2,401 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,240 | $230,031 | 0.54% | F |
| 3BR | $1,520 | $271,977 | 0.56% | F |
| 4BR | $1,630 | $289,365 | 0.56% | F |
| 5BR | $1,891 | $310,948 | 0.61% | D |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP 53214 (West Allis, WI) provides insight into potential investment returns. To start, we annualize the Fair Market Rent (FMR) for a two-bedroom unit, which is set at $1150 per month for FY 2024. This translates to an annual income of $13,800. Given the median home value in West Allis is $255,282, the implied gross yield for a Section 8 rental property is approximately 5.41%. This calculation is derived by dividing the annual income ($13,800) by the median home value ($255,282).
Next, we consider the Zillow Observed Rental Index (ZORI), which indicates a market rent of $1,476 per month for a similar two-bedroom unit. Annualizing this figure yields an annual income of $17,712. Using the same median home value, the gross yield for a market-rent property is about 6.94%. This is calculated by dividing the annual income ($17,712) by the median home value ($255,282).
The difference between these gross yields highlights the financial implications of choosing between Section 8 and market-rate rentals. The higher gross yield of 6.94% for market-rate rentals suggests a potentially better return on investment compared to the 5.41% gross yield from Section 8 properties.
However, the decision should also take into account the 45.1% renter density in West Allis, indicating that nearly half of the population rents rather than owns their homes. This high percentage supports the viability of rental investments, including those under Section 8. Additionally, the N/A-day Days on Market (DOM) suggests that there is strong demand for rental properties in the area, although it does not provide specific data on how long it takes to lease a property.
In conclusion, while market-rate rentals offer a higher gross yield, the robust demand for rentals in West Allis makes Section 8 properties a stable option. Investors must weigh the guaranteed income stability of Section 8 against the higher yields of market-rate rentals based on their individual investment strategies and risk tolerance.
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.