Location: Stephenson County, IL | Metro: Stephenson County, IL
| Unit Size | Monthly FMR |
|---|---|
| Studio | $650 |
| 1 Bedroom | $710 |
| 2 Bedrooms | $930 |
| 3 Bedrooms | $1,180 |
| 4 Bedrooms | $1,460 |
| 5 Bedrooms | $1,694 |
| 6 Bedrooms | $1,897 |
| 7 Bedrooms | $2,049 |
| 8 Bedrooms | $2,151 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 61060 provides a detailed insight into the potential returns for landlords and small-portfolio investors. Using the Federal Market Rent (FMR) for a two-bedroom apartment at $920 per month for fiscal year 2026, the annualized rent would be $11,040. This figure represents the maximum allowable rent under the Section 8 program. Against the median home value of $204,566, the implied gross yield for a property rented through Section 8 would be approximately 5.4%, calculated as $11,040 divided by $204,566.
In contrast, the market rent for a two-bedroom apartment in ZIP 61060, based on Census ACS data, stands at $773 per month. When annualized, this equates to $9,276 per year. Given the same median home value, the implied gross yield for market rent would be roughly 4.5%, calculated as $9,276 divided by $204,566.
The difference between these yields highlights the financial benefits of participating in the Section 8 program. However, the decision should also consider the local rental market dynamics. With a renter density of only 10.7%, it's evident that the majority of residents in ZIP 61060 are homeowners, which could affect the demand for rental properties. Additionally, the N/A-day DOM (days on market) suggests that there isn't enough data to accurately assess how quickly rental units are typically leased, making it challenging to predict vacancy rates.
Given these factors, the Section 8 scenario offers a higher gross yield, making it potentially more attractive. However, landlords must weigh this against the lower renter density and the lack of data on leasing speed. The stability and guaranteed income from the Section 8 program can offset the slightly lower gross yield compared to the market rent, especially in areas where tenant turnover is high or vacancy rates are unpredictable.
For small-portfolio investors, the choice might come down to balancing the desire for a higher yield with the practical realities of managing rental properties in a predominantly homeowner community. The Section 8 cap-rate provides a clear benchmark, but the final decision should incorporate a thorough understanding of the local rental market and the specific needs of potential tenants.
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.