Location: Polk County, WI | Metro: Barron County, WI
| Unit Size | Monthly FMR |
|---|---|
| Studio | $780 |
| 1 Bedroom | $840 |
| 2 Bedrooms | $1,090 |
| 3 Bedrooms | $1,410 |
| 4 Bedrooms | $1,770 |
| 5 Bedrooms | $2,053 |
| 6 Bedrooms | $2,299 |
| 7 Bedrooms | $2,483 |
| 8 Bedrooms | $2,607 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 54826 reveals interesting insights for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a two-bedroom apartment in the metro area for fiscal year 2026 is set at $1,050 per month. When annualized, this equates to $12,600 in potential rental income. In contrast, the market rent for a similar unit, based on Census ACS data, stands at $986 per month, or $11,832 annually.
To derive the gross yield for both scenarios, we use the median home value of $359,955 as a reference point. For the FMR scenario, the annual rental income of $12,600 translates into a gross yield of approximately 3.5%. This is calculated by dividing the annual rental income by the property value: $12,600 / $359,955 = 0.035, or 3.5%. For the market rent scenario, the gross yield drops slightly to about 3.3%, calculated as $11,832 / $359,955 = 0.033, or 3.3%.
Given the 11.6% renter density in ZIP 54826, it is important to note that the demand for rental properties, including those under the Section 8 program, is relatively low compared to areas with higher renter populations. This suggests that achieving the higher FMR rate might be challenging unless the property is exceptionally well-maintained and located in a desirable part of the zip code. The lack of Days on Market (DOM) data further complicates the analysis, as it would provide insight into how quickly properties are rented out.
In conclusion, while the Section 8 program offers a higher gross yield of 3.5% based on the FMR, the reality of the local rental market may push investors towards the more achievable market rent scenario, offering a gross yield of 3.3%. Landlords should consider the local demand and competition when deciding whether to participate in the Section 8 program, as the difference in yield is marginal and may not justify the additional administrative burden.
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.