Location: McKenzie County, ND | Metro: Dunn County, ND
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,010 |
| 1 Bedroom | $1,020 |
| 2 Bedrooms | $1,220 |
| 3 Bedrooms | $1,510 |
| 4 Bedrooms | $2,050 |
| 5 Bedrooms | $2,378 |
| 6 Bedrooms | $2,663 |
| 7 Bedrooms | $2,876 |
| 8 Bedrooms | $3,020 |
U.S. Census Bureau data (2024)
The analysis of Section 8 cap rates for ZIP code 58757 reveals some key insights into potential investment opportunities for landlords and small-portfolio investors.
Based on the Fair Market Rent (FMR) for a two-bedroom apartment set at $1,220 annually for Fiscal Year 2026, and the Census ACS-reported market rent of $856 per month, we can derive the gross yields for both scenarios.
In the case of using the FMR for Section 8, the annualized rent would be $14,640 ($1,220 x 12 months). Given that the median home value is not available, let's assume a property value based on typical metrics used in cap rate calculations. For simplicity, consider a property valued at $200,000, which is a reasonable estimate for many areas. The gross yield in this scenario would be 7.32% ($14,640 / $200,000).
On the other hand, if the market rent of $856 per month is considered, the annualized rent would be $10,272 ($856 x 12 months). Using the same assumed property value of $200,000, the gross yield would be 5.14% ($10,272 / $200,000).
The higher gross yield of 7.32% derived from the FMR is more favorable for investors seeking maximum returns. However, the reality of the rental market in ZIP 58757 must also be taken into account. With a renter density of 59.3%, it indicates a significant portion of the population is already renting, suggesting strong demand for rental properties. This high demand supports the viability of securing tenants at the FMR level.
Despite the lack of data on days on market (DOM), the high renter density suggests that properties should be able to attract tenants quickly, reducing the risk of vacancy and supporting the use of the higher FMR in yield calculations. Therefore, the 7.32% gross yield is more realistic and indicative of the potential returns for Section 8 properties in this area.
It's important to note that while these gross yields provide a starting point for analysis, individual properties may vary widely depending on factors such as condition, location, and amenities. Investors should conduct thorough due diligence before making any investment decisions.
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.