Location: Taylor County, WI | Metro: Eau Claire, WI MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $840 |
| 1 Bedroom | $870 |
| 2 Bedrooms | $1,070 |
| 3 Bedrooms | $1,430 |
| 4 Bedrooms | $1,430 |
| 5 Bedrooms | $1,659 |
| 6 Bedrooms | $1,858 |
| 7 Bedrooms | $2,007 |
| 8 Bedrooms | $2,107 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 54766 provides valuable insights into potential investment opportunities. To begin, let's annualize the figures provided: the Fair Market Rent (FMR) for a two-bedroom apartment is set at $920 per month, equating to an annual rental income of $11,040. Meanwhile, the market rent based on Census ACS data stands at $885 per month, resulting in an annual rental income of $10,620.
The median home value in ZIP 54766 is $184,283. 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 is calculated as follows:
For the market rent scenario, the calculation is:
The 11.2% renter density in ZIP 54766 suggests that while there is demand for rentals, it is not overwhelming. The lack of specific data on Days on Market (DOM) makes it challenging to gauge how quickly properties might be leased, but the available information points towards a more conservative approach.
Given the slight discrepancy between the FMR and market rent figures, the 5.76% gross yield derived from market rent appears to be more realistic. This is because market conditions often dictate actual rental rates, which tend to be lower than government-set FMRs. Landlords should consider this when evaluating the potential returns of a property in ZIP 54766 under the Section 8 program.
In conclusion, while the higher FMR rate could theoretically provide a slightly better gross yield, the market rent scenario offers a more practical outlook for investors looking to align their expectations with current rental trends in the area. This analysis serves as a foundational step for further due diligence, including the examination of specific property costs and local housing market dynamics.
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.