Location: Lawrence County, SD | Metro: Meade County, 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 | $800 |
| 1 Bedroom | $880 |
| 2 Bedrooms | $1,150 |
| 3 Bedrooms | $1,600 |
| 4 Bedrooms | $1,930 |
| 5 Bedrooms | $2,239 |
| 6 Bedrooms | $2,508 |
| 7 Bedrooms | $2,709 |
| 8 Bedrooms | $2,844 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,150 | $277,767 | 0.41% | F |
| 3BR | $1,600 | $356,453 | 0.45% | F |
| 4BR | $1,930 | $408,783 | 0.47% | F |
| 5BR | $2,239 | $522,819 | 0.43% | F |
U.S. Census Bureau data (2024)
The Section 8 housing analysis for ZIP code 57785, located in Sturgis, SD, reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $920, while the Census American Community Survey (ACS) indicates that the market rent stands at $805. This results in a gap of $115, which translates to approximately 14.3% of the market rent.
Given that the FMR exceeds the market rent, landlords and small-portfolio investors can leverage this situation to achieve higher yields. The additional $115 per month that voucher tenants can bring, based on the FMR, makes properties in this area attractive investments. It allows owners to charge closer to the FMR without significantly deterring tenants who rely on vouchers, thereby increasing profitability.
In the context of Sturgis, SD, where 26.4% of residents are renters and the median home value is $382,876, the median income of $63,897 suggests that many individuals may struggle to afford housing at market rates. This economic backdrop supports the argument that voucher tenants can stabilize rental income and improve investment returns.
However, it's important to note that accepting Section 8 tenants also comes with certain administrative responsibilities and potential maintenance costs. Landlords must ensure their units meet Housing Quality Standards (HQS), and there might be slower payment cycles compared to open-market tenants. Despite these considerations, the financial advantage of receiving rents closer to the $920 FMR, rather than the lower market rate, positions Section 8 participation as a strategic move for maximizing investment performance in Sturgis, SD.
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.