Location: Jo Daviess County, IL | Metro: Carroll County, IL
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 | $740 |
| 1 Bedroom | $750 |
| 2 Bedrooms | $930 |
| 3 Bedrooms | $1,210 |
| 4 Bedrooms | $1,450 |
| 5 Bedrooms | $1,682 |
| 6 Bedrooms | $1,884 |
| 7 Bedrooms | $2,035 |
| 8 Bedrooms | $2,137 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $930 | $108,191 | 0.86% | C |
| 3BR | $1,210 | $148,794 | 0.81% | C |
| 4BR | $1,450 | $169,550 | 0.86% | C |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 61053, Mount Carroll, IL, reveals some key insights into the potential returns for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a two-bedroom apartment in the area, as of FY 2026, is set at $920 annually. This figure represents the government's estimate for the maximum rental payment that a tenant participating in the Section 8 program would be responsible for.
In contrast, the market rent for a similar two-bedroom property, based on Census ACS data, is $787 per month. When annualized, this equates to $9,444 per year. Using these figures, we can calculate the implied gross yield for both scenarios relative to the median home value of $146,920 in Mount Carroll.
The implied gross yield for the Section 8 scenario, using the FMR of $920 per month, is calculated as follows: ($920 * 12) / $146,920 = $11,040 / $146,920 ≈ 7.52%. This means that if a landlord were to lease a property to a Section 8 tenant at the FMR, they could expect an annual gross yield of approximately 7.52% on the median home value.
For the market rent scenario, the implied gross yield is ($787 * 12) / $146,920 = $9,444 / $146,920 ≈ 6.43%. Thus, if a landlord were to lease the same property at the market rate, they would achieve a slightly lower annual gross yield of about 6.43%.
Given the 24.0% renter density in Mount Carroll, it is important to note that the demand for rental properties is relatively low compared to other areas. However, the N/A-day Days on Market (DOM) suggests that there is limited data available on how quickly rental properties are being leased, making it difficult to predict the speed of finding tenants. Despite this, the higher implied gross yield from the Section 8 scenario makes it more attractive for investors seeking steady income, as it guarantees a certain level of occupancy due to the nature of the program.
While the market rent scenario offers a higher monthly income, the difference in annual yield between the two is marginal. Therefore, the Section 8 scenario is likely more realistic for most investors in this area, given the stability and guaranteed income from the government subsidy program.
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.