Location: Hand County, SD | Metro: Beadle County, SD
| Unit Size | Monthly FMR |
|---|---|
| Studio | $830 |
| 1 Bedroom | $930 |
| 2 Bedrooms | $1,190 |
| 3 Bedrooms | $1,550 |
| 4 Bedrooms | $1,870 |
| 5 Bedrooms | $2,169 |
| 6 Bedrooms | $2,429 |
| 7 Bedrooms | $2,623 |
| 8 Bedrooms | $2,754 |
U.S. Census Bureau data (2024)
The investment landscape in ZIP code 57381 presents several challenges for first-time Section 8 landlords. One significant issue is tenant turnover. With a market rent of $523 compared to the Federal Market Rent (FMR) of $1,120 for fiscal year 2026, landlords can expect higher turnover rates. This discrepancy suggests that tenants may struggle to afford rent increases outside of Section 8 subsidies, leading to frequent moves and increased administrative costs.
Vacancy exposure is another critical risk factor. The average days on market (DOM) for rental properties in this area is currently unknown, making it difficult to predict how long a property might remain vacant between tenancies. This uncertainty can lead to periods where landlords do not receive rental income, impacting cash flow stability.
Deferred maintenance poses a substantial risk due to the low typical home values and a median income of $79,231. Landlords must be prepared to invest in property upkeep, as tenants receiving Section 8 vouchers often have limited resources to contribute towards maintenance and repairs. Without proactive management, deferred maintenance can escalate into costly issues, further reducing profit margins.
However, these risks are balanced by the high renter share in ZIP 57381, which stands at 39.1%. High renter density typically translates to greater demand for rental housing, including Section 8 vouchers. This robust demand can help mitigate vacancy risks and ensure a steady stream of potential tenants.
In conclusion, despite the challenges, the high renter share in ZIP 57381 makes it a moderate risk for first-time Section 8 landlords. While there are significant hurdles to overcome, the strong tenant base provides a foundation for successful investment with careful management and planning.
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.