Location: Sioux Falls, SD | Metro: Sioux Falls, SD HUD Metro FMR Area
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 | $1,050 |
| 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 |
|---|---|---|---|---|
| 3BR | $1,430 | $292,404 | 0.49% | F |
U.S. Census Bureau data (2024)
ZIP 57035, located in the Sioux Falls, SD HUD Metro FMR Area, serves as a cash-flow anchor within a Section 8 portfolio strategy. This designation is based on the significant spread between the Fair Market Rent (FMR) and the actual market rent, which benefits landlords participating in the Section 8 program.
The FMR for ZIP 57035 in fiscal year 2024 is set at $910, whereas the market rent stands at $745. This means that landlords can secure higher rents through the Section 8 program compared to the local market rates, ensuring a steady and reliable cash flow. The difference of $165 per month provides a buffer against potential market fluctuations and helps cover operational costs and maintenance expenses.
Additionally, the median home value in the area is $329,282, indicating a stable housing market. While this figure does not directly impact rental properties, it suggests a broader economic stability that can support consistent tenant demand and timely rent payments.
The area's renter share at 5.2% and median income of $99,565 do not significantly influence the cash-flow anchor status. These figures suggest a relatively low concentration of renters and a higher income level, but they do not provide enough information to classify ZIP 57035 as an appreciation play or a diversifier. The primary focus for landlords should be on the guaranteed rental income provided by the Section 8 program, which aligns with the cash-flow anchor strategy.
In conclusion, ZIP 57035 is best suited as a cash-flow anchor in a Section 8 portfolio due to the substantial rent differential. Landlords can leverage this to ensure financial stability and predictability, crucial elements for managing a real estate investment portfolio effectively.
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.