Location: Sweet Grass County, MT | Metro: Stillwater County, 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 | $1,340 |
| 1 Bedroom | $1,440 |
| 2 Bedrooms | $1,860 |
| 3 Bedrooms | $2,530 |
| 4 Bedrooms | $2,900 |
| 5 Bedrooms | $3,364 |
| 6 Bedrooms | $3,768 |
| 7 Bedrooms | $4,069 |
| 8 Bedrooms | $4,272 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,530 | $586,542 | 0.43% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 59069 provides a detailed look at potential rental income scenarios. Using the Federal Market Rent (FMR) for a 2-bedroom unit set at $1520 annually for FY 2024, we can calculate the implied gross yield. The median home value in this area stands at $499,947.
To determine the gross yield based on the FMR, we first annualize the rent: $1520 per month translates to $18,240 per year. Dividing this annual rental income by the median home value gives us an implied gross yield of approximately 3.65%. This calculation is straightforward and reflects the guaranteed income under the Section 8 program.
On the other hand, the market rent for a 2-bedroom unit is reported at $1,731 monthly according to Census ACS data. Annualizing this figure results in $20,772 per year. When we divide this by the median home value, the implied gross yield increases to about 4.16%. This higher yield reflects the potential for greater income if the property were rented at market rates.
Given the 8.9% renter density in ZIP 59069, it's important to consider the likelihood of finding tenants willing to pay market rates versus those who qualify for Section 8 assistance. The N/A-day DOM (days on market) indicates that there isn't enough recent data to determine how quickly properties are being rented, which could affect the decision-making process.
In conclusion, while the market rent scenario offers a slightly better gross yield of 4.16%, the Section 8 rent scenario guarantees a consistent income stream at a rate of 3.65%. For investors looking for stability and assured income, the Section 8 option is more realistic, especially considering the limited availability of market data and the significant portion of the population that might rely on rental assistance programs. However, for those willing to take on the risk of potentially longer vacancy periods, the higher market rent could be more appealing.
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.