Location: Sanders County, MT | Metro: Sanders 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 | $860 |
| 1 Bedroom | $930 |
| 2 Bedrooms | $1,160 |
| 3 Bedrooms | $1,440 |
| 4 Bedrooms | $1,910 |
| 5 Bedrooms | $2,216 |
| 6 Bedrooms | $2,482 |
| 7 Bedrooms | $2,681 |
| 8 Bedrooms | $2,815 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $930 | $427,926 | 0.22% | F |
| 2BR | $1,160 | $565,907 | 0.2% | F |
| 3BR | $1,440 | $631,940 | 0.23% | F |
| 4BR | $1,910 | $756,122 | 0.25% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 59874, Trout Creek, MT, provides a clear picture of the potential returns for landlords and small-portfolio investors. Using the annualized Fair Market Rent (FMR) for a 2-bedroom apartment at $980 per month, the annual rental income would be $11,760. Against the median home value of $599,075, this translates to an implied gross yield of approximately 1.96%. This calculation is based on the assumption that the property can be rented out at the FMR rate.
In contrast, using the market rent figure of $676 per month for a 2-bedroom apartment, the annual rental income would be $8,112. When compared to the median home value of $599,075, this yields an implied gross yield of roughly 1.35%. The market rent scenario is more conservative and reflects the actual rental rates observed in the area according to Census ACS data.
The renter density in Trout Creek, MT, stands at 10.2%, indicating a relatively low proportion of renters in the housing market. This suggests that the competition for tenants is less intense, making it more plausible for landlords to achieve rental rates closer to the market rent rather than the higher FMR. The N/A-day Days on Market (DOM) implies either insufficient data or a highly localized rental market, where the typical metrics might not fully apply.
Given these conditions, the market rent scenario appears more realistic for calculating potential returns. While the FMR offers a higher gross yield, the actual performance of properties in this ZIP code is likely to align more closely with the market rent, providing a more accurate expectation for investors. The gross yield difference between the two scenarios highlights the importance of understanding local rental dynamics and the impact of government-set rates versus market-driven ones.
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.