Location: Grant County, WI | Metro: Grant County, WI
| Unit Size | Monthly FMR |
|---|---|
| Studio | $780 |
| 1 Bedroom | $800 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,250 |
| 4 Bedrooms | $1,700 |
| 5 Bedrooms | $1,972 |
| 6 Bedrooms | $2,209 |
| 7 Bedrooms | $2,386 |
| 8 Bedrooms | $2,505 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate picture for ZIP code 53809 reveals interesting insights into the potential returns for landlords and small-portfolio investors. To begin, let's consider the Federal Market Rent (FMR) for a two-bedroom apartment, which is set at $970 annually for fiscal year 2026 in the metropolitan area. This translates to a monthly payment of approximately $80.83 per unit under the Section 8 program.
Given the median home value in ZIP 53809 is $205,653, the implied gross yield when using the Section 8 FMR can be calculated. With an annual rental income of $970, the gross yield would be roughly 0.47%. The formula used here is (Annual Rental Income / Median Home Value) * 100 = Gross Yield. In this case, it's ($970 / $205,653) * 100 ≈ 0.47%.
On the other hand, the market rent for a similar property is reported at $764 annually based on Census ACS data. This equates to a monthly rent of about $63.67. Using the same median home value, the implied gross yield for the market rent scenario is approximately 0.37%. The calculation follows the same logic: ($764 / $205,653) * 100 ≈ 0.37%.
Comparing these two yields, the Section 8 scenario provides a higher gross yield by about 0.1 percentage points. However, the decision between these options should also take into account the 25.6% renter density in the area, which suggests that there is a significant portion of the population who might prefer homeownership over renting. Additionally, the lack of data on days on market (DOM) implies uncertainty regarding how quickly properties can be leased out, potentially affecting the overall occupancy rates.
In conclusion, while the Section 8 program offers a slightly better gross yield at 0.47% compared to the market rent yield of 0.37%, the final decision should factor in the local rental market dynamics, including the relatively low renter density and the unknown leasing speed. For those landlords willing to navigate the specifics of the Section 8 program, the higher yield presents a tangible benefit. However, for small-portfolio investors seeking simplicity and potentially quicker turnover, the market rent scenario, despite offering a lower gross yield, might be more practical given the local conditions.
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.