Location: Manitowoc County, WI | Metro: Appleton, WI MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $790 |
| 1 Bedroom | $870 |
| 2 Bedrooms | $1,120 |
| 3 Bedrooms | $1,540 |
| 4 Bedrooms | $1,600 |
| 5 Bedrooms | $1,856 |
| 6 Bedrooms | $2,079 |
| 7 Bedrooms | $2,245 |
| 8 Bedrooms | $2,357 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 54110 reveals interesting insights into potential investment yields. The Fair Market Rent (FMR) for a 2-bedroom apartment in this area, as determined by HUD for FY 2024, is set at $910 per month. This translates to an annualized FMR of $10,920. In contrast, the Census ACS data indicates a market rent of $794 per month, equating to an annualized market rent of $9,528.
To derive the gross yield for these two scenarios, we use the median home value of $304,103 as a reference point. For the FMR scenario, the implied gross yield is calculated by dividing the annualized FMR by the median home value. This results in a gross yield of approximately 3.59%. For the market rent scenario, the calculation yields a gross yield of around 3.13%.
Given the 17.6% renter density in ZIP 54110, it is important to consider the likelihood of securing long-term tenants. The fact that the Days on Market (DOM) data is listed as N/A suggests either limited turnover or incomplete data, making it difficult to assess the typical time frame for renting out properties. However, the higher gross yield associated with the FMR scenario makes it more attractive from an investment standpoint.
While the FMR scenario offers a better gross yield, the actual rental rate achieved may depend on various factors including property condition, location within the ZIP code, and competition. Landlords and small-portfolio investors should weigh the benefits of potentially higher rents against the risk of lower occupancy rates, especially considering the relatively low renter density.
In summary, the FMR scenario provides a gross yield of 3.59%, while the market rent scenario offers a gross yield of 3.13%. The FMR scenario appears more favorable based on the higher yield, though investors must also consider the local rental market dynamics and the possibility of achieving steady occupancy rates.
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.