Location: Teton County, MT | Metro: Great Falls, MT MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,200 |
| 1 Bedroom | $1,390 |
| 2 Bedrooms | $1,580 |
| 3 Bedrooms | $2,180 |
| 4 Bedrooms | $2,630 |
| 5 Bedrooms | $3,051 |
| 6 Bedrooms | $3,417 |
| 7 Bedrooms | $3,690 |
| 8 Bedrooms | $3,875 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 59436, Choteau, MT, reveals some interesting dynamics when comparing the Federal Market Rent (FMR) and the market rent figures. Using the annualized 2BR FMR of $1000 for FY 2024, the implied gross yield is approximately 0.24%. This calculation is derived by taking the annual rental income ($1000 * 12 months = $12,000) and dividing it by the median home value of $420,311. In contrast, using the market rent figure of $830 from the Census ACS, the implied gross yield drops to about 0.20%, calculated similarly by annualizing the market rent ($830 * 12 months = $9,960) and dividing by the median home value.
Given the 20.2% renter density, the scenario using the market rent appears more realistic. The FMR is often higher than what tenants can afford, leading to lower occupancy rates. The N/A-day Days on Market (DOM) suggests that there might be limited data on how quickly properties are rented out, which could indicate either a stable rental market or a lack of sufficient recent sales data to determine typical market conditions accurately.
The gross-yield comparison shows that the FMR provides a slightly better return at 0.24% compared to the market rent's 0.20%. However, landlords and small-portfolio investors should consider the trade-off between higher potential rental income and the risk of lower occupancy rates. A more conservative approach would likely favor the market rent figure, ensuring steady cash flow even if the gross yield is lower.
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.