Location: McKenzie County, ND | Metro: Richland County, MT
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 | $1,150 |
| 1 Bedroom | $1,160 |
| 2 Bedrooms | $1,300 |
| 3 Bedrooms | $1,560 |
| 4 Bedrooms | $2,180 |
| 5 Bedrooms | $2,529 |
| 6 Bedrooms | $2,832 |
| 7 Bedrooms | $3,059 |
| 8 Bedrooms | $3,212 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,160 | $144,945 | 0.8% | C |
| 2BR | $1,300 | $205,757 | 0.63% | D |
| 3BR | $1,560 | $295,991 | 0.53% | F |
| 4BR | $2,180 | $333,956 | 0.65% | D |
| 5BR | $2,529 | $369,642 | 0.68% | D |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 59270 in Sidney, MT, reveals a clear disparity between the federal market rent (FMR) and the actual market rent. The annualized FMR for a 2-bedroom apartment is set at $1,310 per month, which translates to an annual income of $15,720. When this figure is compared to the median home value of $268,499, it implies a gross yield of approximately 5.86%. This calculation is based on the formula: Gross Yield = (Annual Rent / Median Home Value).
In contrast, the market rent, as indicated by the Zillow Observed Rental Index (ZORI), stands at $1,070 per month, equating to an annual rental income of $12,840. Using the same median home value, this scenario yields a gross rental income of about 4.78%. The difference between these two gross yields is significant, highlighting the potential gap between federally subsidized rents and the prevailing market rates.
Given the renter density of 36.2%, it's important to note that a substantial portion of the population in Sidney, MT, relies on rental housing. However, the lack of data on days on market (DOM) makes it challenging to assess the speed at which properties are rented out. Despite this, the market rent scenario appears more realistic for most investors, considering the need to balance federal subsidies with market conditions.
The 4.78% gross yield based on market rent is likely a more accurate reflection of the potential returns for landlords and small-portfolio investors in Sidney, MT. It aligns better with the economic realities faced by property owners, who must contend with maintenance costs, vacancies, and other expenses. While the higher gross yield of 5.86% based on FMR might seem attractive, it is less likely to be achieved consistently due to the lower market rent. Investors should use these figures as a starting point for their own detailed calculations, factoring in local economic conditions and property-specific details to determine the net operating income (NOI) and ultimately the cap rate.
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.