Location: Meade County, SD | Metro: Rapid City, SD HUD Metro FMR Area
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $870 |
| 1 Bedroom | $960 |
| 2 Bedrooms | $1,250 |
| 3 Bedrooms | $1,730 |
| 4 Bedrooms | $2,100 |
| 5 Bedrooms | $2,436 |
| 6 Bedrooms | $2,728 |
| 7 Bedrooms | $2,946 |
| 8 Bedrooms | $3,093 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,250 | $318,424 | 0.39% | F |
| 3BR | $1,730 | $360,117 | 0.48% | F |
| 4BR | $2,100 | $416,483 | 0.5% | F |
| 5BR | $2,436 | $473,360 | 0.51% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 57718, Blackhawk, SD, reveals a challenging investment environment for landlords and small-portfolio investors. Using the Fair Market Rent (FMR) for a 2-bedroom unit at $1200 per month as of FY 2024, the annualized income would be $14,400. Against the median home value of $362,323, this translates to an implied gross yield of approximately 4%. The calculation is straightforward: $14,400 divided by $362,323 equals roughly 4%.
However, comparing this to the market rent of $1,167 per month based on Census ACS data presents a slightly different scenario. Annualizing this figure gives us an annual income of $14,004, resulting in an implied gross yield of about 3.9%. This slight difference between the FMR and market rent yields underscores the thin margins available in this ZIP code for Section 8 properties.
Given the low renter density of 11.6%, it becomes evident that relying solely on Section 8 tenants might pose occupancy risks. The N/A-day DOM (Days on Market) suggests that there isn't enough data to accurately predict how long properties might remain vacant, adding another layer of uncertainty. Therefore, while the FMR scenario offers a marginally higher gross yield at 4%, the actual market conditions suggest that achieving the FMR consistently could be difficult due to the limited pool of potential tenants.
In conclusion, the gross yield for Section 8 properties in ZIP 57718 is realistically closer to the market rent-derived figure of 3.9%. Landlords and investors should consider these yields when evaluating the profitability of Section 8 investments in this area, especially given the occupancy challenges posed by the low renter density.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.