Location: Lafayette County, WI | Metro: Madison, WI HUD Metro FMR Area
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 | $1,150 |
| 1 Bedroom | $1,340 |
| 2 Bedrooms | $1,530 |
| 3 Bedrooms | $2,020 |
| 4 Bedrooms | $2,260 |
| 5 Bedrooms | $2,622 |
| 6 Bedrooms | $2,937 |
| 7 Bedrooms | $3,172 |
| 8 Bedrooms | $3,331 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,020 | $338,463 | 0.6% | F |
U.S. Census Bureau data (2024)
The analysis of ZIP code 53516 in Lafayette County, WI, reveals several key points for landlords and small-portfolio investors.
The first question to address is whether the rent math works. The Fair Market Rent (FMR) for the zip code in fiscal year 2024 is set at $1250, which significantly exceeds the current market rent of $697 based on Census ACS data. This discrepancy suggests that landlords could potentially increase rents to align closer with the FMR, thereby improving their rental income. However, it also indicates a current gap where market conditions do not fully support such high rental rates.
Moving on to the affordability of acquisitions, the median home value in ZIP 53516 stands at $348,857. Given the lack of specific data on days on market (DOM) and the percentage of homes requiring price cuts, we can infer that the real estate market might be stable but not highly dynamic. Landlords should consider this median value as a benchmark for purchasing properties, keeping in mind that they may need to invest in repairs or improvements to justify higher rents.
Regarding tenant demand, the population of ZIP 53516 is 2,238, with 15.2% of residents being renters. This relatively low renter share implies a smaller pool of potential tenants compared to areas with higher percentages of renters. Landlords will need to ensure their properties offer competitive amenities and pricing to attract and retain tenants in this environment.
Verdict: While the potential exists to raise rents to meet the FMR, the current market rent is substantially lower. The median home value of $348,857 makes acquisitions costly, especially without detailed insights into DOM and price-cut percentages. With only 15.2% of the population renting, landlords must carefully position their properties to cater to the limited tenant demand. Overall, ZIP 53516 presents a challenging investment landscape, requiring strategic planning to achieve profitability.
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.