Location: Sioux County, ND | Metro: Sioux County, ND
| Unit Size | Monthly FMR |
|---|---|
| Studio | $790 |
| 1 Bedroom | $800 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,410 |
| 4 Bedrooms | $1,700 |
| 5 Bedrooms | $1,972 |
| 6 Bedrooms | $2,209 |
| 7 Bedrooms | $2,386 |
| 8 Bedrooms | $2,505 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 58528 provides insight into potential rental income and property values. With an annualized Fair Market Rent (FMR) for a 2BR unit at $870 for FY 2026, and a market rent figure of $413 derived from the Census ACS, we can estimate the gross yield for both scenarios.
In the case of Section 8, the implied gross yield is calculated using the annualized FMR. Assuming a 2BR unit's annual rent under Section 8 is $870, the gross yield would be based on this amount. However, without a specific median home value for ZIP 58528, a precise cap rate cannot be determined. The FMR reflects the government-set rent limit, which ensures that low-income families pay no more than 30% of their adjusted income for housing.
For the market rent scenario, the annualized market rent for a 2BR unit is $413. This is significantly lower than the Section 8 FMR, suggesting that the gross yield for market rent would also be lower. Again, due to the lack of median home value data, the exact cap rate remains undetermined. But it's clear that the gross yield from market rents would be less attractive compared to the guaranteed Section 8 rents.
The 66.7% renter density in ZIP 58528 indicates a strong demand for rental properties, making Section 8 participation a viable option for landlords and small-portfolio investors. The N/A-day Days on Market (DOM) suggests that the local real estate market moves quickly, which could benefit those looking to lease properties under Section 8.
Conclusion: Given the higher annualized rent under Section 8 ($870) versus the market rent ($413), the gross yield from participating in the Section 8 program is more favorable. The high renter density further supports the attractiveness of this option. While the exact cap rates cannot be calculated due to missing median home value data, the comparative advantage of Section 8 over market rents is evident. Landlords should consider these factors when deciding whether to participate in the Section 8 program.
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.