Location: Perkins County, SD | Metro: Adams County, ND
| Unit Size | Monthly FMR |
|---|---|
| Studio | $830 |
| 1 Bedroom | $840 |
| 2 Bedrooms | $1,070 |
| 3 Bedrooms | $1,470 |
| 4 Bedrooms | $1,780 |
| 5 Bedrooms | $2,065 |
| 6 Bedrooms | $2,313 |
| 7 Bedrooms | $2,498 |
| 8 Bedrooms | $2,623 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 program in ZIP code 58639 reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent. The FMR for the metro area in fiscal year 2026 is set at $930, whereas the Census ACS data indicates an average market rent of $568. This means that the FMR is $362 higher than the market rent, representing a 63.7% premium.
This substantial gap makes the ZIP code an attractive yield play for landlords and small-portfolio investors. Voucher tenants under the Section 8 program can offer a more stable and reliable source of income compared to non-voucher tenants. Given that 30.4% of residents in the area are renters, there is a notable demand for rental properties. Additionally, the median home value of $145,253 and the median income of $63,636 suggest that homeownership is less prevalent, further driving rental demand.
The higher FMR allows landlords to receive payments closer to the $930 mark, which exceeds the typical market rent. This differential can be leveraged to increase property yields, as the guaranteed payment from the housing authority can cover the costs of maintenance and management while providing a buffer against the lower market rents.
However, it's important to note that accepting Section 8 tenants also comes with certain administrative burdens and potential restrictions. Landlords must adhere to specific guidelines and regulations set by the housing authority, which can affect how they manage their properties. Despite these considerations, the financial benefits of receiving higher rent payments through the voucher system outweigh the drawbacks for many investors.
In summary, the $362 premium or 63.7% above the market rent in ZIP 58639 presents a compelling opportunity for landlords and small-portfolio investors to maximize their returns. The demographic context supports a robust rental market, making it advantageous 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.