Location: Madison, WI | Metro: Janesville-Beloit, WI MSA
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 |
|---|---|---|---|---|
| 2BR | $1,530 | $307,220 | 0.5% | F |
| 3BR | $2,020 | $407,355 | 0.5% | F |
| 4BR | $2,260 | $484,039 | 0.47% | F |
U.S. Census Bureau data (2024)
The potential pitfalls of investing in Section 8 properties in ZIP code 53589, located in Stoughton, Wisconsin, include higher tenant turnover rates due to the disparity between the market rent of $1,496 and the Fair Market Rent (FMR) of $1250 for fiscal year 2024. This discrepancy can lead to increased vacancy exposure, especially when considering that the days on market (DOM) for vacant properties is currently not available, indicating a lack of data on how quickly units typically become occupied. Additionally, there is a significant risk of deferred maintenance, as the typical home value in the area is $429,643 while the median household income stands at $96,226. The lower income levels relative to property values may result in tenants being less likely to cover additional costs for maintenance or repairs.
However, these risks must be weighed against the high concentration of renters in the area, with 24.3% of residents being renters. High renter density often translates into a greater demand for housing vouchers, which can provide a steady stream of qualified tenants. This demand can help mitigate some of the risks associated with tenant turnover and vacancy exposure, ensuring that there is a consistent pool of applicants interested in Section 8 properties.
Verdict: Moderate risk for a first-time Section 8 landlord.
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.