Location: Iowa County, WI | Metro: Madison, WI HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,150 |
| 1 Bedroom | $1,340 |
| 2 Bedrooms | $1,530 |
| 3 Bedrooms | $2,020 |
| 4 Bedrooms | $2,460 |
| 5 Bedrooms | $2,854 |
| 6 Bedrooms | $3,196 |
| 7 Bedrooms | $3,452 |
| 8 Bedrooms | $3,625 |
U.S. Census Bureau data (2024)
When evaluating whether to invest in ZIP code 53507 for Section 8 properties, follow this decision tree:
Step 1: Debt Service Coverage Ratio (DSCR)
The Fair Market Rent (FMR) for ZIP 53507 in fiscal year 2024 is set at $1290. Determine if this amount can cover the debt service on your potential property. Since the property value is listed as N/A, you must first assess the specific property's debt service requirements. If the $1290 FMR per month cannot meet or exceed the monthly debt service, then the answer is No.
Step 2: Market Rent Comparison
The average market rent in ZIP 53507, according to Census ACS data, is $1162. Compare this figure to the FMR of $1290. As the market rent is below the FMR, landlords who can secure Section 8 tenants will have an advantage over those relying solely on market-rate rents. This suggests a Yes to investing in Section 8 properties in this area, given that the previous step was also positive.
Step 3: Rental Demand Assessment
In ZIP 53507, 18.4% of residents are renters. Additionally, the days on market (DOM) for rental listings is not specified, making it N/A. Despite this lack of information on DOM, the percentage of renters indicates a moderate demand for rental properties. However, without knowing the DOM, it's difficult to quantify how competitive the rental market is. Thus, the answer here is It Depends. If the DOM is low, indicating quick turnover and strong interest in rentals, then the investment could be viable. Conversely, if DOM is high, suggesting a slow rental market, the investment may not be as attractive.
To conclude, if the FMR of $1290 meets or exceeds the debt service of the property, and the market rent of $1162 is lower than the FMR, then the ZIP 53507 has potential for Section 8 investments. The final decision hinges on the rental demand, which requires additional data on DOM to make a definitive assessment.
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.