Location: Portage County, WI | Metro: Portage County, WI
| Unit Size | Monthly FMR |
|---|---|
| Studio | $720 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $1,030 |
| 3 Bedrooms | $1,230 |
| 4 Bedrooms | $1,350 |
| 5 Bedrooms | $1,566 |
| 6 Bedrooms | $1,754 |
| 7 Bedrooms | $1,894 |
| 8 Bedrooms | $1,989 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 54406 reveals an interesting contrast between federal market rent (FMR) and actual market rents. Using the annualized 2BR FMR of $970 for fiscal year 2026, the potential annual rental income would be $11,640. Given the median home value of $355,912, the implied gross yield for a Section 8 property under this scenario would be approximately 3.27%. This calculation is based on the simple formula of dividing the annual rental income by the property's value.
In contrast, using the Census ACS-reported market rent of $919, the annualized income drops to $11,028, resulting in a gross yield of about 3.09%. The difference between these two yields, while seemingly minor, can significantly impact investment decisions and overall portfolio performance.
Given the 15.0% renter density in ZIP 54406, it is important to consider how this affects the realism of these gross yields. A lower renter density typically implies less competition among renters, which could mean that market rents might be closer to the FMR in this area. However, the lack of data on days on market (DOM) makes it challenging to assess how quickly properties might be leased or the stability of rental income over time.
The higher gross yield based on FMR ($970) is more optimistic and reflects a scenario where all units are rented at the federally set rates. Conversely, the yield based on the market rent ($919) is more conservative and aligns with current economic conditions as reported by the Census Bureau. For most investors, the latter figure is likely more realistic, as it considers the actual rental environment rather than hypothetical federal guidelines.
It is crucial for landlords and small-portfolio investors to understand these nuances when evaluating potential investments in ZIP 54406. While the higher yield may seem attractive, the lower market-based yield offers a clearer picture of what can realistically be expected from rental income in this area.
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.