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 | $910 |
| 1 Bedroom | $1,020 |
| 2 Bedrooms | $1,260 |
| 3 Bedrooms | $1,610 |
| 4 Bedrooms | $1,950 |
| 5 Bedrooms | $2,262 |
| 6 Bedrooms | $2,533 |
| 7 Bedrooms | $2,736 |
| 8 Bedrooms | $2,873 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,260 | $226,383 | 0.56% | F |
| 3BR | $1,610 | $367,126 | 0.44% | F |
| 4BR | $1,950 | $460,752 | 0.42% | F |
U.S. Census Bureau data (2024)
In evaluating the viability of investing in ZIP code 53406, which encompasses Mount Pleasant, WI, several key concerns arise that need addressing. The first objection is whether the Fair Market Rent (FMR) of $1,070 for the fiscal year 2024 will sufficiently cover the mortgage on a median-priced home valued at $323,416. This is a valid concern given the high cost of housing. However, it's important to note that the median home value does not necessarily reflect the price of rental properties. Many homes in this area are likely priced below the median, making the FMR more feasible for covering mortgage payments.
The second objection pertains to the level of renter demand, with the investor questioning if the 29.2% rate is sufficient. While this percentage might seem low compared to densely populated urban areas, it's crucial to consider the local context. Mount Pleasant, WI, is a suburban community where homeownership rates are typically higher. A 29.2% rental rate suggests a stable and consistent demand for rental properties, particularly among those who prefer renting over buying due to lifestyle choices or financial considerations.
The final objection is whether voucher holders will be able to afford the market rent of $1,620. Voucher holders often have income restrictions that limit their ability to pay beyond what the voucher covers. The FMR of $1,070 is lower than the market rent, indicating that without additional income from roommates or other sources, voucher holders may struggle to cover the full rent. However, landlords can still benefit from the voucher program as it guarantees a certain level of payment through the Housing Choice Voucher Program, which is administered by the local housing authority.
To summarize, while the FMR of $1,070 may not cover the mortgage on a median-priced home, it's more likely to align with rental properties. The 29.2% rental rate indicates a steady demand for rentals, suitable for a suburban setting. Lastly, the discrepancy between FMR and market rent highlights a challenge for voucher holders but also an opportunity for landlords to participate in the voucher program with guaranteed payments. These points provide a balanced view of the investment potential in ZIP code 53406.
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.