Location: Richland County, WI | Metro: Vernon County, WI HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $710 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,260 |
| 4 Bedrooms | $1,490 |
| 5 Bedrooms | $1,728 |
| 6 Bedrooms | $1,935 |
| 7 Bedrooms | $2,090 |
| 8 Bedrooms | $2,195 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 54639 provides a clear picture of potential rental income versus the Fair Market Rent (FMR) and market rent values. For a two-bedroom unit, the annualized FMR for FY 2026 is $11,640 ($970 per month), while the Census ACS reported market rent stands at $9,048 ($754 per month).
The median home value in ZIP 54639 is $208,014. This figure allows us to calculate the implied gross yield for both the FMR and market rent scenarios. Using the FMR, the implied gross yield is approximately 5.6%. This calculation is derived from dividing the annualized FMR of $11,640 by the median home value of $208,014. In contrast, using the market rent, the implied gross yield drops significantly to about 4.3%, calculated by dividing the annualized market rent of $9,048 by the median home value.
Given the 22.4% renter density in the area, it is important to note that a substantial portion of the housing stock is already occupied by renters. However, the lack of Days on Market (DOM) data means we cannot accurately assess how quickly rental units are being filled or vacated. Despite this limitation, the FMR scenario appears more realistic for Section 8 investors due to the federal government's commitment to paying the difference between the tenant's contribution and the FMR. This ensures a stable income stream for landlords who participate in the program, even if the actual market rent is lower.
To further illustrate the point, let’s compare these yields directly. A property valued at $208,014 generating an annual rent of $11,640 (FMR scenario) would provide a landlord with a gross yield of 5.6%. Conversely, a property generating $9,048 annually (market rent scenario) would offer a gross yield of only 4.3%. The higher gross yield under the FMR scenario indicates a potentially better return on investment for properties participating in the Section 8 program.
In conclusion, while the market rent suggests a lower gross yield, the stability and guaranteed payment structure of the FMR under the Section 8 program make it a more attractive option for landlords and small-portfolio investors in ZIP 54639. The higher gross yield of 5.6% based on FMR provides a clearer indication of the financial benefits of participating in the program compared to the 4.3% gross yield based on market rent.
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.