Location: Phillips County, MT | Metro: Blaine County, MT
| Unit Size | Monthly FMR |
|---|---|
| Studio | $810 |
| 1 Bedroom | $890 |
| 2 Bedrooms | $1,070 |
| 3 Bedrooms | $1,360 |
| 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 Section 8 program in ZIP code 59542 presents a unique opportunity for real estate investors, given the disparity between the Fair Market Rent (FMR) and the actual market rent. The FMR for the metro area in fiscal year 2026 is set at $1,040. However, the market rent data is currently unavailable, which suggests that the FMR might be significantly lower than what the open market can bear.
If we assume that the market rent exceeds the FMR, then landlords who accept housing vouchers can benefit from a yield play. This means that despite receiving a fixed amount from the government, the rental property can still generate higher returns compared to other investment opportunities in the area. For instance, with a median income of $57,222 and 31.3% of residents being renters, the demand for affordable housing is substantial. Yet, the supply of rental properties priced at or near the FMR level could be limited, making it advantageous for landlords to participate in the Section 8 program.
On the other hand, if the market rent is indeed higher than the FMR, accepting housing voucher tenants comes with the cost of renting out units below the open-market rate. This scenario would mean that landlords might leave money on the table by not charging the full market rent. The difference between the FMR and the market rent can represent a significant discount for tenants, but it also implies a lower gross rental income for landlords.
To illustrate the impact, consider the following: if the market rent were hypothetically $1,200 per month, the gap between the FMR and market rent would be $160, or approximately 15.4%. This gap highlights the potential financial trade-off landlords face when deciding whether to accept Section 8 tenants. While the FMR ensures a steady stream of rental income guaranteed by the government, it does not reflect the true market value of the property, especially in areas where the median home value is unknown but the median income suggests a higher willingness to pay.
In conclusion, the decision to accept Section 8 tenants in ZIP 59542 should be made with an understanding of the local rental market dynamics. Landlords must weigh the benefits of guaranteed income against the potential loss of revenue from renting below market rates. The analysis should be anchored in the broader economic context, including the percentage of renters and median income levels, to make informed decisions about participation in 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.