Location: Dodge County, WI | Metro: Dodge County, WI
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 | $840 |
| 1 Bedroom | $940 |
| 2 Bedrooms | $1,170 |
| 3 Bedrooms | $1,550 |
| 4 Bedrooms | $1,560 |
| 5 Bedrooms | $1,810 |
| 6 Bedrooms | $2,027 |
| 7 Bedrooms | $2,189 |
| 8 Bedrooms | $2,298 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,170 | $235,393 | 0.5% | F |
| 3BR | $1,550 | $296,276 | 0.52% | F |
| 4BR | $1,560 | $359,952 | 0.43% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 53916, located in Beaver Dam, WI, provides insight into potential investment opportunities. To derive the cap-rate, we first calculate the gross yield based on the Fair Market Rent (FMR) and the market rent.
Annualizing the 2BR FMR of $1,110 for fiscal year 2026, the annual income would be $13,320 ($1,110 x 12 months). Given the median home value of $288,098, the implied gross yield for the Section 8 scenario is approximately 4.62%. This calculation is straightforward and reflects the rental income that can be expected under the Section 8 program.
For the market rent scenario, using the ZORI (Zillow Observed Rent Index) figure of $1,244, the annual income would be $14,928 ($1,244 x 12 months). The implied gross yield for this scenario is approximately 5.18%, which is higher than the Section 8 scenario.
Given the 35.0% renter density in the area, it is important to note that while the market rent scenario offers a slightly better gross yield, the stability and predictability of Section 8 rents should also be considered. The N/A-day DOM (Days on Market) suggests that there is no recent data available regarding how quickly properties are rented out, which could indicate either a steady demand or an irregular rental market.
Investors should weigh the benefits of the higher gross yield from market rents against the guaranteed and stable income from Section 8. While the market rent scenario presents a more attractive gross yield, the lower risk associated with Section 8 might appeal to investors seeking long-term, predictable cash flows. The choice between these two scenarios ultimately depends on the investor's risk tolerance and investment goals.
In conclusion, for ZIP 53916, the gross yields are 4.62% for Section 8 and 5.18% for market rents. These figures provide a clear comparison point for investors looking to understand the financial implications of each option in this specific market. The decision should factor in the local rental market dynamics, including the high renter density, to determine the most suitable investment strategy.
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.