Section 8 Fair Market Rent (FMR) for ZIP 53553 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

The Section 8 cap-rate analysis for ZIP code 53553 provides valuable insights into potential investment opportunities for landlords and small-portfolio investors. Based on the Fair Market Rent (FMR) for a two-bedroom apartment at $990 annually for fiscal year 2024, and the market rent at $500 annually according to the Census ACS, we can derive the implied gross-yield against the median home value of $240,905.

First, let's annualize the FMR and market rent figures. The annualized FMR for a two-bedroom unit in ZIP 53553 is $990, while the annualized market rent is $500. Using these figures, we can calculate the implied gross-yields:

• FMR Scenario: With an annual rent of $990 and a median home value of $240,905, the implied gross-yield is approximately 0.41%. This calculation is derived by dividing the annual rent by the median home value ($990 / $240,905).
• Market Rent Scenario: At an annual rent of $500 and the same median home value of $240,905, the implied gross-yield drops significantly to about 0.21%. This is calculated by dividing the annual market rent by the median home value ($500 / $240,905).

Given the 20.4% renter density in ZIP 53553, the FMR scenario presents a more realistic outlook for potential rental income. However, the lack of Days on Market (DOM) data complicates the assessment of how quickly properties might be leased under either scenario. Despite this, the higher yield from the FMR scenario suggests a more favorable investment opportunity compared to the market rent scenario.

Investors should note that while the FMR scenario offers a better gross-yield, it does not account for operational costs such as property management, maintenance, and vacancies. These factors must be considered when determining the actual net operating income (NOI) and ultimately the cap rate. Nonetheless, the gross-yield comparison clearly shows that the FMR scenario provides nearly double the return compared to the market rent scenario, making it a more attractive option for those seeking to leverage Section 8 housing assistance in ZIP 53553.

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.