Location: Custer County, SD | Metro: Custer County, SD HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $980 |
| 1 Bedroom | $1,070 |
| 2 Bedrooms | $1,400 |
| 3 Bedrooms | $1,920 |
| 4 Bedrooms | $2,340 |
| 5 Bedrooms | $2,714 |
| 6 Bedrooms | $3,040 |
| 7 Bedrooms | $3,283 |
| 8 Bedrooms | $3,447 |
U.S. Census Bureau data (2024)
The investment risk assessment for ZIP code 57738 highlights several potential issues that could impact landlords and small-portfolio investors engaging with Section 8 housing. First, the tenant turnover rate can be problematic when considering the market rent versus the Fair Market Rent (FMR) of $1,270 for FY 2026, which is set based on metropolitan area standards. The lack of specific data on market rent makes it challenging to gauge how competitive the FMR is, potentially leading to higher turnover if tenants seek lower rents elsewhere.
Vacancy exposure is another concern, especially due to the absence of data on Days on Market (DOM). This metric is crucial for understanding how quickly properties can be rented out, and without it, there's uncertainty about the time properties might remain vacant. Vacancies can significantly affect cash flow, particularly in areas where rental demand is not robust.
Deferred maintenance exposure is also notable. With a median income of $52,308, residents may struggle to afford significant home improvements, even if they are necessary. This can pose a challenge for landlords who must maintain their properties to meet Section 8 standards but may face difficulties in recovering the costs through rent alone.
However, these risks are somewhat mitigated by the high concentration of renters in ZIP 57738, with 4.3% of the population being renters. High renter density often translates into a greater demand for rental vouchers, which can stabilize occupancy rates and reduce vacancy periods. The presence of a substantial number of voucher holders can provide a reliable stream of tenants willing to pay the FMR, thus stabilizing the property's financial performance.
In summary, despite the uncertainties around market rent, DOM, and deferred maintenance, the high renter density suggests a relatively stable tenant pool. Therefore, the overall risk for a first-time Section 8 landlord in ZIP 57738 is moderate.
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.