Location: Crawford County, WI | Metro: Crawford County, WI
| Unit Size | Monthly FMR |
|---|---|
| Studio | $730 |
| 1 Bedroom | $930 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,210 |
| 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 analysis for ZIP code 54626 reveals a detailed picture of the potential Section 8 cap rates based on the Fair Market Rent (FMR) and market rent figures. For a two-bedroom unit, the annualized FMR stands at $970 per month, while the market rent is $803 per month according to the Census ACS data. Using these figures against the median home value of $240,876, we can derive the implied gross yields.
First, let's calculate the gross yield using the FMR. The annual rent at FMR would be $11,640 ($970 x 12 months). Dividing this by the median home value gives us an implied gross yield of approximately 4.83%. This calculation suggests that if landlords were to lease properties exclusively through Section 8, they could expect a gross rental income of 4.83% of the median home value annually.
Next, we consider the market rent scenario. The annual rent at market rates would be $9,636 ($803 x 12 months). Dividing this by the median home value results in an implied gross yield of about 4.00%. Thus, under market conditions, landlords would see a lower gross yield of 4.00% compared to the Section 8 scenario.
Given the 15.4% renter density in ZIP 54626, it's important to note that the availability of tenants willing to participate in the Section 8 program might be limited. However, the lack of data regarding the days on market (DOM) makes it challenging to provide a precise estimate of how quickly units might be filled under either scenario. Despite this, the higher gross yield of 4.83% derived from the FMR suggests that Section 8 could offer a more attractive option for landlords seeking stable rental income.
In conclusion, the Section 8 cap rate picture for ZIP 54626 indicates a gross yield of 4.83% based on FMR, versus 4.00% based on market rent. While the market rent scenario reflects current conditions, the Section 8 program offers a potentially more stable and slightly higher gross yield, making it a viable consideration for landlords and small-portfolio investors.
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.