Location: Madison, WI | Metro: Madison, WI HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,330 |
| 1 Bedroom | $1,530 |
| 2 Bedrooms | $1,750 |
| 3 Bedrooms | $2,310 |
| 4 Bedrooms | $2,590 |
| 5 Bedrooms | $3,004 |
| 6 Bedrooms | $3,364 |
| 7 Bedrooms | $3,633 |
| 8 Bedrooms | $3,815 |
U.S. Census Bureau data (2024)
A decision tree for whether a landlord should invest in ZIP code 53706 for Section 8 properties follows these key steps:
Step 1: Can the Fair Market Rent (FMR) of $1620 cover the debt service?
No: If the FMR cannot cover the debt service on a property in ZIP 53706, then the investment is not financially viable. Do not proceed.
Yes: The FMR of $1620 can potentially cover the debt service. Move to the next step.
It Depends: Insufficient information is available to determine if the FMR clears the debt service. Evaluate further.
Step 2: How does the market rent compare to the FMR?
Market Rent Below FMR: At $983, the market rent is below the FMR of $1620. This indicates that Section 8 tenants could pay more than what the market demands, which is favorable. Proceed to the next step.
Market Rent Equal to FMR: If the market rent were equal to the FMR, the situation would be neutral. However, since the market rent is below the FMR, this scenario is not applicable.
Market Rent Above FMR: This scenario is not applicable given the current data.
Step 3: Is there sufficient demand?
No: If the demand is not strong enough, even with 100.0% of the population renting and an unspecified number of days on the market (DOM), the investment will likely underperform. Do not buy.
Yes: With 100.0% of the population renting and an unspecified number of days on the market, the demand appears to be robust. This suggests a stable tenant pool. Buy.
It Depends: The unspecified number of DOM makes it challenging to gauge the exact demand level. More specific data on DOM would clarify whether the demand is strong enough to support a Section 8 investment.
In summary, if the Fair Market Rent of $1620 can cover the debt service, and the market rent of $983 is lower than the FMR, then the ZIP 53706 presents a financially advantageous opportunity for landlords interested in Section 8 investments. However, the strength of the demand must be considered based on the rental rate and the number of days properties stay on the market before making a final decision.
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.