Location: Grant County, SD | Metro: Grant County, SD
| Unit Size | Monthly FMR |
|---|---|
| Studio | $820 |
| 1 Bedroom | $900 |
| 2 Bedrooms | $1,180 |
| 3 Bedrooms | $1,410 |
| 4 Bedrooms | $1,860 |
| 5 Bedrooms | $2,158 |
| 6 Bedrooms | $2,417 |
| 7 Bedrooms | $2,610 |
| 8 Bedrooms | $2,741 |
U.S. Census Bureau data (2024)
The Section 8 real estate thesis in ZIP code 57246 is anchored by a significant gap between the Fair Market Rent (FMR) and the actual market rent. The FMR for the metro area in fiscal year 2026 is set at $930, whereas the Census ACS reports the average market rent at $506. This means there is a gap of $424, or approximately 84%, between what the government deems as fair market rent and what is actually being paid by renters.
This scenario presents an opportunity for landlords and small-portfolio investors to capitalize on a yield play. Voucher tenants under the Section 8 program can offer a guaranteed and stable source of income, as their rents are subsidized up to the FMR level. In ZIP 57246, where only 15.3% of residents are renters, securing a tenant through the Section 8 program ensures a consistent rental income that exceeds the local market rate. Given the median income of $72,917, it is evident that many residents would struggle to pay the higher FMR without assistance.
However, it is important to note that accepting Section 8 tenants also comes with certain administrative costs and compliance requirements. Landlords must ensure that their units meet HUD standards, which can sometimes necessitate additional investments in property maintenance and upgrades. Despite these considerations, the potential to earn above-market rents makes ZIP 57246 a compelling market for those willing to engage with the Section 8 program.
In summary, the disparity between the FMR and market rent in ZIP 57246 creates a unique investment opportunity for landlords and small-portfolio investors. By leveraging the Section 8 program, they can secure a steady stream of income that is significantly higher than the prevailing market rates, making this a strategic choice for maximizing yields in a low-renter population area.
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.