Location: Clay County, SD | Metro: Sioux City, IA-NE-SD MSA
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $780 |
| 1 Bedroom | $890 |
| 2 Bedrooms | $1,070 |
| 3 Bedrooms | $1,430 |
| 4 Bedrooms | $1,750 |
| 5 Bedrooms | $2,030 |
| 6 Bedrooms | $2,274 |
| 7 Bedrooms | $2,456 |
| 8 Bedrooms | $2,579 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,070 | $227,089 | 0.47% | F |
| 3BR | $1,430 | $327,937 | 0.44% | F |
| 4BR | $1,750 | $371,961 | 0.47% | F |
U.S. Census Bureau data (2024)
ZIP 57004, located in Beresford, SD, within Clay County's metro area, serves as an ideal cash-flow anchor for a Section 8 portfolio strategy. The Federal Market Rent (FMR) for FY 2024 stands at $910, which exceeds the local market rent of $901. This creates a positive spread of $9, ensuring that properties in this ZIP code can generate stable and slightly above-market rental income.
The median home value in ZIP 57004 is $322,826. While this figure is significant, it does not impact the cash flow directly since Section 8 tenants pay a portion of their income towards rent, with the remainder covered by the government. However, it does provide context for the overall property values in the area, suggesting that homes are generally affordable and well-suited for low-income families who often participate in the Section 8 program.
The ZIP code has a renter share of 16.5%, indicating that while a portion of the population rents, there is still a majority owning their homes. This balance is favorable for a Section 8 strategy, as it suggests a steady demand for rental units without the volatility seen in purely rental markets. Additionally, the median income of $88,750 is relatively high, which could contribute to a lower risk of tenant default or inability to pay their portion of the rent.
A cash-flow anchor in a Section 8 portfolio is crucial for providing consistent income and offsetting any potential losses or fluctuations in other parts of the investment strategy. ZIP 57004 offers this stability due to the slight premium in FMR over market rent, combined with the solid median income level that supports tenant reliability.
While appreciation plays and diversifiers have their merits, ZIP 57004 excels as a cash-flow anchor because it provides predictable and reliable returns. Landlords and small-portfolio investors should focus on acquiring properties in this ZIP code to ensure a stable income stream, leveraging the slight rent premium and the financial stability of the local residents.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.