Location: Walworth County, WI | Metro: Janesville-Beloit, WI MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,220 |
| 1 Bedroom | $1,290 |
| 2 Bedrooms | $1,690 |
| 3 Bedrooms | $2,160 |
| 4 Bedrooms | $2,240 |
| 5 Bedrooms | $2,598 |
| 6 Bedrooms | $2,910 |
| 7 Bedrooms | $3,143 |
| 8 Bedrooms | $3,300 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate picture for ZIP code 53505 reveals significant insights into the potential rental yields for landlords and small-portfolio investors. Using the Fair Market Rent (FMR) for a two-bedroom unit set at $1130 per month for FY 2024, we can annualize this figure to $13,560. In contrast, the market rent for a similar unit, based on Census ACS data, stands at $931 monthly, which annualizes to $11,172.
To derive the gross yield, we take the annualized rents and divide them by the median home value of $380,849. For the Section 8 scenario, the gross yield is approximately 3.56% ($13,560 / $380,849), whereas the market rent scenario implies a gross yield of around 2.93% ($11,172 / $380,849).
The higher gross yield in the Section 8 scenario makes it more attractive for landlords looking to secure a stable income stream. However, the decision to participate in Section 8 should also consider the local rental market dynamics. With a renter density of 14.6%, the competition for tenants might be less intense compared to areas with higher renter populations, potentially making market rent a viable option if landlords can find willing renters.
The lack of data on the days on market (DOM) for rentals in ZIP 53505 limits our ability to assess how quickly properties might be leased under either scenario. However, the higher gross yield from Section 8 suggests that landlords could achieve better returns relative to the median home value. This advantage, coupled with the program's stability and guaranteed payments, positions Section 8 as a more realistic and favorable option for achieving higher yields in ZIP 53505.
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.