Location: Madison, 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 | $1,350 |
| 1 Bedroom | $1,550 |
| 2 Bedrooms | $1,760 |
| 3 Bedrooms | $2,300 |
| 4 Bedrooms | $2,550 |
| 5 Bedrooms | $2,958 |
| 6 Bedrooms | $3,313 |
| 7 Bedrooms | $3,578 |
| 8 Bedrooms | $3,757 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,300 | $481,030 | 0.48% | F |
U.S. Census Bureau data (2024)
The HUD Fair Market Rent (FMR) for ZIP code 53598 in the Madison, WI HUD Metro FMR Area for fiscal year 2024 is set at $1,570. This figure represents the maximum amount that landlords can charge for a Section 8 voucher tenant in the area. However, the current market rent, as indicated by the Zillow Observed Rental Index (ZORI), stands at $1,850. Given these numbers, landlords will only achieve positive cash flow with Section 8 tenants if they manage properties with premium units that command higher rents or if they operate efficiently with lower costs.
To further analyze the market dynamics, consider the median home value in ZIP 53598, which is $495,200. Using this figure, we can calculate a rent-to-price ratio. At $1,570 per month, the annual rent is $18,840. Dividing this by the median home value gives us a rent-to-price ratio of approximately 3.8%. This suggests that rental income represents a relatively modest portion of the property's value, implying that appreciation or stability might be stronger investment angles compared to cash flow alone.
Note that the data does not provide specific details on the median Days on Market (DOM) or the percentage of homes that have been discounted. These metrics could offer additional insights into the rent-versus-buy dynamics in the area. Nonetheless, given the established figures, it is clear that landlords operating under Section 8 in ZIP 53598 must focus on unit quality and cost management to ensure profitability.
The strongest angle for investors in this market is likely appreciation. With a median home value well above the average for many areas, and considering the robust rental market, there is significant potential for property values to increase over time, providing a solid return on investment.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.