Location: Ransom County, ND | Metro: Barnes County, ND
| Unit Size | Monthly FMR |
|---|---|
| Studio | $840 |
| 1 Bedroom | $860 |
| 2 Bedrooms | $1,110 |
| 3 Bedrooms | $1,370 |
| 4 Bedrooms | $1,860 |
| 5 Bedrooms | $2,158 |
| 6 Bedrooms | $2,417 |
| 7 Bedrooms | $2,610 |
| 8 Bedrooms | $2,741 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 58049 is based on the annualized Fair Market Rent (FMR) for a two-bedroom apartment, which is set at $940 for fiscal year 2026. This figure represents the maximum amount that a landlord can charge for a Section 8 voucher in this area. However, the median home value and the market rent for non-assisted units are not available, which complicates the direct comparison.
To derive the cap-rate picture, we first need to understand the concept of a cap-rate, which is essentially the ratio of net operating income (NOI) to the current market value of a property. In the context of Section 8, the gross yield can be calculated by dividing the annual rental income by the median home value. Given the FMR of $940, the annual rental income for a two-bedroom unit would be $11,280 ($940 x 12 months).
In the absence of the median home value, it's impossible to calculate an exact cap-rate. However, if we hypothetically assume a median home value similar to that of nearby areas, we can infer a general range for the gross yield. For instance, if the median home value were around $200,000, the implied gross yield would be approximately 5.64% ($11,280 / $200,000). If the median home value were higher, say $300,000, the gross yield would drop to about 3.76%. These figures represent the upper and lower bounds of what could be expected under a Section 8 program.
Given the 4.9% renter density in ZIP 58049, it suggests a relatively low demand for rentals compared to owner-occupied homes. This low density might indicate that the rental market is less competitive, potentially making the lower-end gross yield of 3.76% more realistic. The lack of data on days on market (DOM) also implies that there isn't a high turnover rate, which can be beneficial for long-term stability but may also limit opportunities for quick property flips.
The key takeaway is that while the exact cap-rate cannot be determined without the median home value, the gross yield for a Section 8 unit in ZIP 58049 is likely to fall between 3.76% and 5.64%, depending on the actual home values. Investors should consider these figures in conjunction with the local rental market dynamics and the specific needs of their portfolio.
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.