Location: Vernon County, WI | Metro: La Crosse-Onalaska, WI-MN HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $870 |
| 1 Bedroom | $980 |
| 2 Bedrooms | $1,250 |
| 3 Bedrooms | $1,560 |
| 4 Bedrooms | $1,850 |
| 5 Bedrooms | $2,146 |
| 6 Bedrooms | $2,404 |
| 7 Bedrooms | $2,596 |
| 8 Bedrooms | $2,726 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 54658 provides a clear picture of the potential returns for landlords and small-portfolio investors considering the program. To start, we annualize the Fair Market Rent (FMR) for a 2-bedroom apartment at $1200 per month, which equates to an annual rental income of $14,400. Given the median home value in the area stands at $317,982, this scenario implies a gross yield of approximately 4.53%. This calculation is based on the formula for gross yield: (Annual Rental Income / Property Value) * 100.
In contrast, using the market rent figure of $885 per month from the Census ACS, the annual rental income drops to $10,620. Applying the same median home value, this results in a significantly lower gross yield of about 3.34%. The disparity between these two yields highlights the financial advantage of participating in the Section 8 program over relying solely on market rents.
The 17.3% renter density in ZIP 54658 suggests that a substantial portion of the population is already accustomed to renting, which could indicate a stable demand for rental properties. However, the N/A-day DOM (Days on Market) statistic complicates the analysis, as it does not provide insight into how quickly properties are typically leased in this area. This lack of data means that while the higher gross yield from the FMR scenario is attractive, it's essential to consider the likelihood of securing a Section 8 tenant promptly.
Given the available data, the FMR-based gross yield of 4.53% appears more optimistic and aligns with the benefits often cited for Section 8 participation. Nevertheless, the reality of achieving this yield hinges on factors such as the ease of finding qualified tenants and the efficiency of the local housing authority. The market rent yield of 3.44%, while less appealing, reflects a more conservative estimate that doesn't depend on the complexities of government programs.
For investors looking to leverage the Section 8 program in ZIP 54658, the 4.53% gross yield presents a compelling opportunity. However, they must be prepared for the administrative challenges and potential delays in securing a tenant. For those who prefer a straightforward investment approach, the market rent yield offers a safer, albeit less lucrative, path forward.
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.