Location: Spink County, SD | Metro: Brown County, SD
| Unit Size | Monthly FMR |
|---|---|
| Studio | $800 |
| 1 Bedroom | $880 |
| 2 Bedrooms | $1,150 |
| 3 Bedrooms | $1,450 |
| 4 Bedrooms | $1,790 |
| 5 Bedrooms | $2,076 |
| 6 Bedrooms | $2,325 |
| 7 Bedrooms | $2,511 |
| 8 Bedrooms | $2,637 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 57474 reveals two distinct situations based on available data.
In the first scenario, using the annualized Fair Market Rent (FMR) for a 2-bedroom apartment of $1,010 (FY 2026), we can calculate the implied gross yield. With a median home value not available (N/A), we must rely solely on the rental income to determine potential returns. Given that the median home value is N/A, it's impossible to calculate an exact cap rate without knowing the purchase price. However, assuming a median home value similar to other areas with comparable 2BR FMRs, we can infer that the gross yield would be relatively low due to the limited rental income compared to typical home values.
In the second scenario, where market rent is also N/A, the situation remains ambiguous. Without specific market rent data, it's challenging to provide a precise gross yield. This lack of information suggests that market conditions might be unstable or underreported, making it difficult to assess the true earning potential for landlords in this area.
To provide context, consider the 3.6% renter density in ZIP 57474. This indicates a lower demand for rental properties compared to owner-occupied homes, potentially affecting the desirability of Section 8 properties. The N/A-day Days on Market (DOM) further complicates the analysis, as it does not give insight into how quickly properties are being leased or sold.
Based on the available data, the first scenario with the $1,010 FMR provides a clearer picture of potential returns, albeit with significant assumptions about home values. The gross yield derived from this figure would be modest, reflecting the conservative nature of Section 8 rents. The second scenario, with market rent data missing, offers less certainty but could imply higher potential yields if market rents exceed the FMR significantly. However, the current data does not support this conclusion.
Given the limitations in the data, the first scenario appears more realistic for investment planning purposes. It provides a baseline for expected returns, which can then be adjusted based on individual property valuations and market conditions.
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.