Location: Ashland County, WI | Metro: Ashland County, WI
| Unit Size | Monthly FMR |
|---|---|
| Studio | $770 |
| 1 Bedroom | $780 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,410 |
| 4 Bedrooms | $1,550 |
| 5 Bedrooms | $1,798 |
| 6 Bedrooms | $2,014 |
| 7 Bedrooms | $2,175 |
| 8 Bedrooms | $2,284 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 54527 reveals an interesting picture when comparing the federal market rent (FMR) to the actual market rent. The annualized FMR for a two-bedroom apartment is set at $970, while the Census ACS indicates a market rent of $559 per month.
To calculate the implied gross yield, we must first determine the annual rents. For the FMR scenario, multiplying $970 by 12 yields an annual rent of $11,640. Dividing this figure by the median home value of $140,236 gives us an implied gross yield of approximately 8.3%. On the other hand, the annual market rent based on the $559 figure amounts to $6,708. This results in an implied gross yield of about 4.8% when compared to the median home value.
The difference between these two yields is significant. The FMR-based yield of 8.3% suggests a higher potential return for landlords participating in the Section 8 program. However, the reality of the rental market in ZIP 54527, with its 11.5% renter density, casts doubt on the likelihood of achieving such high yields consistently. Given the limited data on days on market (DOM), it's challenging to assess the speed at which properties can be leased, but the low renter density implies a competitive market for rentals.
In conclusion, while the FMR scenario offers a more attractive gross yield, the actual market conditions suggest that the lower yield of 4.8%, based on the Census ACS data, is more realistic for landlords and small-portfolio investors in ZIP 54527. Investors should consider these figures carefully when evaluating the potential returns of properties 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.