Location: Polk County, WI | Metro: Minneapolis-St. Paul-Bloomington, MN-WI HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,120 |
| 1 Bedroom | $1,270 |
| 2 Bedrooms | $1,540 |
| 3 Bedrooms | $2,040 |
| 4 Bedrooms | $2,280 |
| 5 Bedrooms | $2,645 |
| 6 Bedrooms | $2,962 |
| 7 Bedrooms | $3,199 |
| 8 Bedrooms | $3,359 |
U.S. Census Bureau data (2024)
A landlord considering investing in ZIP 54017 (New Richmond, WI) for Section 8 properties must evaluate several factors to make an informed decision.
Step 1: Can the Fair Market Rent (FMR) of $1310 cover the debt service on a property valued at $375,287?
No: The FMR of $1310 does not clear the debt service on a property costing $375,287. For a typical mortgage, with interest rates around 5%, the annual debt service would be approximately $22,500, which is higher than the annual FMR income of $15,720 ($1310 per month).
Yes: This scenario is unlikely given the current FMR and property values. However, if the landlord has a lower-cost property or can secure a significantly lower interest rate, then the FMR could potentially cover the debt service.
It Depends: On the specifics of the mortgage terms and the landlord's ability to manage costs effectively. In most cases, the FMR will not suffice for such a high-value property.
Step 2: How does the Zillow Rent Index (ZORI) of $1,711 compare to the FMR of $1,310?
ZORI is Above FMR: At $1,711, the ZORI is significantly above the FMR of $1,310. This indicates that landlords might struggle to find tenants willing to pay the full market rent under Section 8, leading to potential vacancies or loss of income.
ZORI is At or Below FMR: This is not the case for ZIP 54017. Since the ZORI is above the FMR, landlords should expect challenges in fully renting out their units at market value.
Step 3: Is there sufficient demand with 24.5% of residents being renters and unknown days on market (DOM)?
No: Without knowing the DOM, it's challenging to assess the exact rental demand. However, with only 24.5% of residents being renters, the pool of potential Section 8 tenants is limited. This percentage suggests a smaller market for rental properties, making it harder to attract and retain tenants.
Yes: If the DOM is short, indicating quick rentals, then the 24.5% of renters might be enough to support a Section 8 investment. However, this is speculative without concrete DOM data.
It Depends: On the DOM and other local economic factors. A short DOM could mitigate the low percentage of renters, but a long DOM would exacerbate the issue.
In conclusion, ZIP 54017 presents significant challenges for Section 8 investments due to the mismatch between FMR and market rents, as well as the limited rental population. Landlords should proceed with caution and consider alternative investment strategies or locations.
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.