Location: Sauk County, WI | Metro: Richland County, WI
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 | $750 |
| 1 Bedroom | $900 |
| 2 Bedrooms | $1,070 |
| 3 Bedrooms | $1,350 |
| 4 Bedrooms | $1,550 |
| 5 Bedrooms | $1,798 |
| 6 Bedrooms | $2,014 |
| 7 Bedrooms | $2,175 |
| 8 Bedrooms | $2,284 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,350 | $287,732 | 0.47% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 53556 provides a detailed look at potential rental income versus the Fair Market Rent (FMR) and market rent rates. Using the annualized 2BR FMR of $980 for fiscal year 2026, the implied gross yield for a property in this area would be approximately 3.98%. This calculation is derived by taking the annual rent ($980) and dividing it by the median home value ($246,026).
In contrast, using the market rent figure of $859 from the Census ACS, the implied gross yield drops to about 3.49%. This lower yield is calculated similarly, by dividing the annual market rent ($859 x 12 months = $10,308) by the median home value.
The gross yield comparison highlights that the Section 8 scenario offers a slightly better return on investment compared to the market rent scenario. However, the actual feasibility of achieving these yields depends heavily on the local rental market conditions and the specific requirements of the Section 8 program.
Given the 16.0% renter density in ZIP 53556, it's important to note that the demand for rental properties, including those under the Section 8 program, may be somewhat limited. This suggests that while the higher gross yield from the FMR-based scenario might be theoretically possible, the reality of finding and retaining tenants could affect the overall profitability.
The N/A-day DOM (days on market) indicates that there isn't sufficient data to determine how quickly properties are typically leased in this area. Without this information, it's challenging to assess the vacancy rate risk, which is crucial for calculating the Net Operating Income (NOI) and ultimately the cap rate.
Despite the limitations in data, the gross yield difference between the two scenarios is clear: the Section 8 option offers a marginally higher return at 3.98% versus the market rent option at 3.49%. Landlords and small-portfolio investors should consider the additional administrative and regulatory aspects of participating in the Section 8 program before deciding if the higher yield justifies the effort.
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.