Location: Marshall County, SD | Metro: Day County, SD
| Unit Size | Monthly FMR |
|---|---|
| Studio | $810 |
| 1 Bedroom | $890 |
| 2 Bedrooms | $1,170 |
| 3 Bedrooms | $1,600 |
| 4 Bedrooms | $1,850 |
| 5 Bedrooms | $2,146 |
| 6 Bedrooms | $2,404 |
| 7 Bedrooms | $2,596 |
| 8 Bedrooms | $2,726 |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 57232 is centered around the significant disparity between the Fair Market Rent (FMR) and the actual market rent. The FMR for the metro area in fiscal year 2026 is set at $1,060, whereas the market rent, based on Census ACS data, stands at $775. This creates a gap of $285, or approximately 37%, between what landlords can charge under the Section 8 program and the prevailing open-market rental rates.
Given that the FMR exceeds the market rent, it is clear that voucher tenants can be a lucrative opportunity for landlords and small-portfolio investors. By participating in the Section 8 program, landlords can command rents that are substantially higher than the current market rate, thereby enhancing their rental yields. For instance, a landlord could potentially earn an additional $285 per month from each Section 8 unit, which translates into a significant increase in overall portfolio returns.
The context of ZIP 57232 further supports this analysis. With only 4.8% of residents classified as renters, there is a limited supply of rental units relative to the demand for affordable housing. Additionally, the median household income of $93,750 suggests that many residents might find it challenging to afford market-rate rentals, making them prime candidates for Section 8 vouchers. This dynamic increases the attractiveness of the program for landlords, as it ensures a stable and reliable tenant base willing to pay the higher FMR rates.
However, it is important to note that while the potential for higher yields exists, landlords must also consider the administrative and regulatory requirements associated with the Section 8 program. These include regular inspections, adherence to housing quality standards, and timely submission of paperwork. Despite these challenges, the financial benefits of renting at FMR levels above the market rate can outweigh the costs for those willing to comply with the program's regulations.
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.