Location: Chicago-Joliet-Naperville, IL | Metro: Chicago-Joliet-Naperville, IL HUD Metro FMR Area
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 | $1,460 |
| 1 Bedroom | $1,550 |
| 2 Bedrooms | $1,750 |
| 3 Bedrooms | $2,250 |
| 4 Bedrooms | $2,570 |
| 5 Bedrooms | $2,981 |
| 6 Bedrooms | $3,339 |
| 7 Bedrooms | $3,606 |
| 8 Bedrooms | $3,786 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,550 | $188,693 | 0.82% | C |
| 2BR | $1,750 | $333,344 | 0.52% | F |
| 3BR | $2,250 | $431,380 | 0.52% | F |
| 4BR | $2,570 | $559,548 | 0.46% | F |
| 5BR | $2,981 | $682,210 | 0.44% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 60714 in Niles, IL, provides a clear picture of the potential returns for landlords and small-portfolio investors. For the fiscal year 2024, the Fair Market Rent (FMR) for a 2-bedroom apartment in ZIP 60714 is set at $1,590 annually. This translates to a monthly rental income of approximately $132.50 under the Section 8 program. The median home value in this area is $398,474. Using these figures, we can calculate the implied gross yield.
First, let's consider the Section 8 scenario. With a monthly income of $132.50, the annual income would be $1,590. To find the gross yield, we divide this annual income by the median home value:
Gross Yield = ($1,590 / $398,474) * 100 = 0.40%
This low gross yield suggests that properties in ZIP 60714 may not be particularly attractive for Section 8 tenants if the goal is to maximize rental income. However, it's important to note that the Section 8 program ensures stable, government-backed payments, which can be appealing for long-term investment strategies.
Next, we look at the market rent scenario. The Zillow Observed Rent Index (ZORI) for a 2-bedroom apartment in ZIP 60714 is $3,087 annually. This equates to a monthly market rent of roughly $257.25. Using the same median home value, we calculate the gross yield:
Gross Yield = ($3,087 / $398,474) * 100 = 0.77%
This higher gross yield indicates that renting out properties at market rates could be more financially beneficial for landlords and investors in the short term. However, the decision should also factor in the local rental market dynamics. In ZIP 60714, the renter density stands at 25.2%, meaning a significant portion of the population prefers homeownership over renting. Additionally, the Days on Market (DOM) for rentals is 10 days, suggesting a relatively quick turnover rate for available units.
Given these conditions, while the market rent scenario offers a better gross yield, the high homeownership rate and quick rental turnover might favor a more balanced approach. Landlords and investors should consider the stability and predictability of Section 8 rents versus the potentially higher income from market rents. Both scenarios have their merits depending on the investor's risk tolerance and financial goals.
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.