Location: Stillwater County, MT | Metro: Billings, MT HUD Metro FMR Area
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $920 |
| 1 Bedroom | $1,000 |
| 2 Bedrooms | $1,290 |
| 3 Bedrooms | $1,790 |
| 4 Bedrooms | $2,150 |
| 5 Bedrooms | $2,494 |
| 6 Bedrooms | $2,793 |
| 7 Bedrooms | $3,016 |
| 8 Bedrooms | $3,167 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,290 | $358,295 | 0.36% | F |
| 3BR | $1,790 | $472,550 | 0.38% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate picture for ZIP 59001, Absarokee, Montana, can be analyzed using the Fair Market Rent (FMR) and market rent figures. For a two-bedroom unit, the annualized FMR is $1050 per month, equating to $12,600 annually. The market rent stands at $1,011 per month, translating to $12,132 annually. Using these figures against the median home value of $445,328, we can calculate the implied gross yield.
In the scenario where the rental income is based on the FMR, the gross yield is calculated as follows:
For the market rent scenario, the calculation is:
Given that only 19.2% of the population in ZIP 59001 are renters, it's important to consider the demand for rental properties, particularly those participating in the Section 8 program. The N/A-day Days on Market (DOM) indicates that there isn't enough data to provide an accurate average time it takes to rent out a property, which could suggest either a very quick rental process or significant variability in the market.
The gross yield derived from the FMR is slightly higher at 2.83%, compared to the market rent yield of 2.72%. However, the lower renter density suggests that relying solely on the FMR might overestimate the potential rental income, as not all units may be filled at this rate. Therefore, the market rent yield of 2.72% is likely more reflective of the actual rental income potential in this area.
Investors should take into account the limited renter base when evaluating the feasibility of Section 8 properties in ZIP 59001. While the FMR provides a benchmark, the market conditions and the relatively low proportion of renters indicate that the actual yields may hover closer to the market rent yield. This analysis offers a clear snapshot of the gross yields, allowing investors to make informed decisions based on their own financial projections.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.