Location: Racine-Mount Pleasant, WI | Metro: Racine-Mount Pleasant, 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 | $860 |
| 1 Bedroom | $960 |
| 2 Bedrooms | $1,190 |
| 3 Bedrooms | $1,520 |
| 4 Bedrooms | $1,840 |
| 5 Bedrooms | $2,134 |
| 6 Bedrooms | $2,390 |
| 7 Bedrooms | $2,581 |
| 8 Bedrooms | $2,710 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,190 | $201,710 | 0.59% | F |
| 3BR | $1,520 | $252,632 | 0.6% | D |
| 4BR | $1,840 | $289,769 | 0.63% | D |
| 5BR | $2,134 | $297,934 | 0.72% | D |
U.S. Census Bureau data (2024)
The ZIP code 53405 in Racine, WI, presents a unique investment scenario for landlords and small-portfolio investors when considering both yield and stability. The Fair Market Rent (FMR) for the fiscal year 2024 is set at $1,130, which is notably lower than the market rent of $1,260. This suggests that there is potential for slightly higher rental yields if properties can be leased at market rates.
To calculate the yield, we compare the FMR against the median home value of $227,101. At an FMR of $1,130, the annual rental income would be $13,560. Dividing this by the median home value gives us a rental yield of approximately 6%. This is above average, indicating a relatively high-yield market. However, the market rent of $1,260 brings the annual income to $15,120, increasing the yield to about 6.65%. This further solidifies the high-yield classification for this area.
Moving on to stability, the ZIP code has 23.7% of its residents classified as renters. This percentage is relatively low, suggesting that the area might not have a robust rental market. Additionally, the lack of available data on the number of days on market (DOM) indicates either limited turnover or insufficient data points to draw conclusions. The median household income of $69,242 provides some insight into the financial health of the residents, but it does not directly correlate to rental stability.
In conclusion, ZIP 53405 leans towards being a high-yield market due to the disparity between the FMR and market rent, coupled with the relatively high rental yields calculated from the median home value. However, the stability of the market is questionable given the low percentage of renters and the absence of DOM data. Therefore, this area is best categorized as a high-yield/low-stability market, suitable for those who can manage short-term fluctuations and are willing to take on the risks associated with potentially less stable tenant demographics.
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.