Location: Buffalo County, WI | Metro: Buffalo County, WI
| Unit Size | Monthly FMR |
|---|---|
| Studio | $730 |
| 1 Bedroom | $780 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,210 |
| 4 Bedrooms | $1,570 |
| 5 Bedrooms | $1,821 |
| 6 Bedrooms | $2,040 |
| 7 Bedrooms | $2,203 |
| 8 Bedrooms | $2,313 |
U.S. Census Bureau data (2024)
The analysis of Section 8 cap rates for ZIP code 54622 reveals an interesting contrast between government-subsidized rental income and market-driven rental income. To begin, let's consider the annualized Fair Market Rent (FMR) for a two-bedroom apartment set at $970 per month by the federal government for fiscal year 2026. This translates into an annual income of $11,640. In comparison, the Census ACS reports the market rent for a similar unit at $733 per month, which amounts to an annual income of $8,796.
The median home value in ZIP 54622 is $235,033. Using this figure, we can calculate the implied gross yield for both the FMR and market rent scenarios. For the FMR scenario, the gross yield would be approximately 4.95%, calculated by dividing the annual income ($11,640) by the median home value ($235,033). Conversely, under the market rent scenario, the gross yield drops significantly to about 3.74%, derived from the annual income ($8,796) divided by the median home value ($235,033).
The renter density of 8.4% suggests that a relatively small portion of the population in ZIP 54622 is actively seeking rental housing. This could indicate a less competitive rental market, where securing tenants might not be as challenging as in areas with higher renter densities. However, the N/A-day Days on Market (DOM) implies incomplete data, which could mean either a very quick or slow leasing process, depending on the context. Given these factors, the FMR-based gross yield of 4.95% appears more realistic for landlords participating in the Section 8 program, as it offers a guaranteed rent level that is higher than the market rate. The stability and predictability of government subsidies can offset potential risks associated with lower tenant turnover.
In summary, while the market rent scenario yields a gross return of 3.74%, the FMR scenario, supported by the Section 8 program, provides a higher and more stable gross yield of 4.95%. Landlords and small-portfolio investors should consider the benefits of the Section 8 program, especially in light of the lower competition for rental units and the certainty of rental income.
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.