Location: Yankton County, 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 |
|---|---|---|---|---|
| 2BR | $1,050 | $185,938 | 0.56% | F |
| 3BR | $1,430 | $263,850 | 0.54% | F |
| 4BR | $1,750 | $318,633 | 0.55% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate picture for ZIP 57070 (Viborg, SD) reveals a low gross yield scenario when comparing Federal Market Rent (FMR) to median home values. Using the annualized 2BR FMR of $910 for FY 2024, the implied gross yield is calculated as follows:
$910 annual rent divided by the median home value of $255,738 equals an implied gross yield of approximately 0.35%. This figure is derived directly from the provided data and represents the rental income potential if a property were rented at the FMR rate.
Contrastingly, using the market rent of $728 per month from the Census ACS, the implied gross yield drops even further to about 0.28%. This calculation is based on the direct relationship between the monthly market rent and the median home value, annualizing the market rent to derive the gross yield.
Given the 35.3% renter density in Viborg, SD, it's important to note that the majority of homeowners in this area do not rent out their properties. This suggests that relying solely on FMR rates for rental income may not be the most realistic approach for investors. However, the N/A-day DOM (Days on Market) indicates there is no available data on how long properties typically stay on the market before being rented, which limits our ability to make precise comparisons.
In conclusion, the gross yield for a property rented at the FMR rate is significantly higher than at the market rent rate. However, the actual rental rates may vary due to the local housing market dynamics and the specific conditions of individual properties. For small-portfolio investors, understanding these nuances is crucial for making informed decisions.
Note: The calculations above provide a baseline for comparing rental income to property value. Investors should consider additional factors such as property management costs, vacancy rates, and maintenance expenses when evaluating investment opportunities.
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.