Location: Yankton County, SD | Metro: Clay County, SD
| Unit Size | Monthly FMR |
|---|---|
| Studio | $800 |
| 1 Bedroom | $990 |
| 2 Bedrooms | $1,160 |
| 3 Bedrooms | $1,610 |
| 4 Bedrooms | $1,800 |
| 5 Bedrooms | $2,088 |
| 6 Bedrooms | $2,339 |
| 7 Bedrooms | $2,526 |
| 8 Bedrooms | $2,652 |
U.S. Census Bureau data (2024)
The analysis for ZIP code 57072 reveals a significant disparity between the potential rental income under Section 8 and the prevailing market rents. Using the annualized Fair Market Rent (FMR) for a 2-bedroom unit at $1,280, we can calculate the implied gross yield for Section 8 properties. This equates to an annual rental income of $15,360 ($1,280 x 12 months).
Comparing this to the median home value of $322,112, the implied gross yield for a Section 8 property is approximately 4.77%. The calculation is straightforward: $15,360 / $322,112 = 0.0477 or 4.77%. This yield is based on the assumption that the property would be rented out at the FMR rate set by the government.
On the other hand, the Census ACS data indicates a market rent of $655 per month for a 2-bedroom unit. Annualizing this figure gives us $7,860 ($655 x 12 months), leading to an implied gross yield of about 2.44% when compared to the median home value: $7,860 / $322,112 = 0.0244 or 2.44%. This lower yield reflects the typical rental rates in the area and does not benefit from the higher rates provided by the Section 8 program.
The renter density of 18.0% suggests that a relatively small portion of the population in ZIP 57072 is looking for rental housing. This could impact the demand for Section 8 properties, as it may be harder to find tenants willing to accept the terms of the Section 8 program. However, given the N/A-day Days on Market (DOM) figure, we cannot definitively state how quickly these units might be leased.
In conclusion, while the Section 8 program offers a higher gross yield of 4.77%, the actual market conditions imply a more modest yield of 2.44%. Given the low renter density, the 4.77% yield scenario may not be as readily achievable, especially if there is limited demand for subsidized housing in the area. Landlords and small-portfolio investors should consider these figures carefully when deciding whether to participate in the Section 8 program or to lease properties at market rates.
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.