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 analysis of Section 8 cap rates for ZIP code 58538 provides a clear picture of the potential rental income dynamics. For the two-bedroom Fair Market Rent (FMR) set at $880 annually for fiscal year 2026, the gross yield calculation becomes straightforward. Given that the median home value is not available, we must rely on other metrics to provide context.
First, let's consider the annualized Section 8 rent of $880 for a two-bedroom unit. This figure represents the maximum amount a landlord can charge for rent through the Section 8 program in this area. To calculate the gross yield, we would typically divide the annual rent by the property value. However, since the median home value is not provided, we cannot calculate a precise gross yield for this scenario. Nonetheless, it is important to note that the annual rent of $880 is guaranteed by the government, providing stability for landlords.
Next, we look at the market rent of $452 per month based on Census ACS data. This equates to an annual market rent of $5,424. Again, without the median home value, we cannot determine the exact gross yield. But we can infer that the market rent is significantly higher than the Section 8 rent, indicating that landlords might receive a higher gross yield if they do not participate in the Section 8 program.
The renter density of 58.5% suggests a substantial portion of residents are renters, which could indicate a competitive market for rental properties. The lack of days on market (DOM) data makes it challenging to assess how quickly properties are rented out, but high renter density generally implies a steady demand for rentals.
In conclusion, while we cannot provide a specific gross yield due to the absence of median home value data, the comparison between the Section 8 rent and the market rent is stark. The guaranteed $880 annual rent through Section 8 contrasts with the $5,424 annual market rent, suggesting that market rent offers a better gross yield for landlords. However, the decision to participate in Section 8 should also consider factors such as tenant turnover, maintenance costs, and the reliability of guaranteed rent payments. Given the high renter density, landlords might find both options viable depending on their investment goals.
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.