Location: Hill County, MT | Metro: Hill County, MT
| Unit Size | Monthly FMR |
|---|---|
| Studio | $900 |
| 1 Bedroom | $970 |
| 2 Bedrooms | $1,180 |
| 3 Bedrooms | $1,630 |
| 4 Bedrooms | $1,740 |
| 5 Bedrooms | $2,018 |
| 6 Bedrooms | $2,260 |
| 7 Bedrooms | $2,441 |
| 8 Bedrooms | $2,563 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap rate scenario for ZIP code 59528 reveals important insights for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a two-bedroom apartment in this area, as set by HUD for fiscal year 2026, is $1,140 per month. However, the median home value in the area is not available, nor is the exact market rent for comparable units.
To derive the rough cap-rate picture, we must first annualize the FMR. This means multiplying the monthly FMR of $1,140 by 12 months, resulting in an annual rent income of $13,680. If we assume a property value based on the FMR, using a common multiplier of 100 times the annual rent, the implied property value would be $1,368,000. Given this, the implied gross yield from the FMR would be approximately 1%, calculated by dividing the annual rent income by the property value.
In the absence of market rent data, it's challenging to provide a precise comparison. However, the lack of availability suggests that market rents could either be significantly higher or lower than the FMR, depending on the local housing dynamics. For instance, if market rents were hypothetically $1,500 per month, the annualized rent would be $18,000. Assuming a similar property valuation method, this would imply a property value of $1,800,000, leading to a gross yield of 1%. This gross yield remains consistent across both hypothetical scenarios, indicating that the rental income is proportionate to the assumed property values.
The gross yield derived from the FMR is more realistic for ZIP 59528 due to the 19.0% renter density. This low percentage implies a smaller pool of potential renters, making it less likely that market rents would significantly exceed the FMR. Additionally, the fact that the Days on Market (DOM) is not available suggests that properties may not sell quickly, further supporting the use of FMR-based calculations for a more accurate representation of the rental market dynamics.
In conclusion, while the market rent is currently unavailable, the gross yield derived from the HUD-set FMR provides a reliable benchmark for investment decisions in ZIP 59528. Landlords and investors should consider this 1% gross yield as indicative of the potential returns when evaluating properties under the Section 8 program.
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.