Location: Sauk County, WI | Metro: Sauk County, WI
| Unit Size | Monthly FMR |
|---|---|
| Studio | $820 |
| 1 Bedroom | $960 |
| 2 Bedrooms | $1,130 |
| 3 Bedrooms | $1,400 |
| 4 Bedrooms | $1,530 |
| 5 Bedrooms | $1,775 |
| 6 Bedrooms | $1,988 |
| 7 Bedrooms | $2,147 |
| 8 Bedrooms | $2,254 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 53577 reveals a notable discrepancy between the Federal Market Rent (FMR) and the actual market rents. Using the annualized 2BR FMR of $1,110 for FY 2026, the implied gross yield is approximately 4.3%. This figure is derived by multiplying the monthly FMR by 12 and dividing it by the median home value of $307,230.
In contrast, using the market rent of $893 from the Census ACS, the implied gross yield drops to about 3.5%. The calculation here also involves annualizing the monthly market rent and dividing it by the median home value. This lower yield reflects the realities of the local rental market.
Given the 21.2% renter density in ZIP 53577, it's important to note that the FMR scenario, while providing a higher gross yield of 4.3%, may not be sustainable long-term. Landlords should consider the actual market conditions when setting their expectations for rental income. The FMR rate is set by HUD and can sometimes be higher than what the market will bear, especially in areas with lower renter density.
The N/A-day DOM (Days on Market) indicates incomplete data, suggesting potential issues with obtaining accurate market data. However, based on the available information, the market rent scenario with a gross yield of 3.5% appears more realistic. It aligns better with the current demand for rentals in the area and avoids overestimating potential income.
To summarize, while the FMR scenario offers a gross yield of 4.3%, the market rent scenario provides a more grounded gross yield of 3.5%. Investors should use the latter as a baseline for their financial projections, adjusting for any unique factors in their portfolio.
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.