Location: Jo Daviess County, IL | Metro: Jo Daviess County, IL
| Unit Size | Monthly FMR |
|---|---|
| Studio | $650 |
| 1 Bedroom | $760 |
| 2 Bedrooms | $930 |
| 3 Bedrooms | $1,290 |
| 4 Bedrooms | $1,300 |
| 5 Bedrooms | $1,508 |
| 6 Bedrooms | $1,689 |
| 7 Bedrooms | $1,824 |
| 8 Bedrooms | $1,915 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 61075 reveals some interesting insights. Using the annualized Fair Market Rent (FMR) for a 2-bedroom apartment set at $920 for fiscal year 2026, the implied gross yield can be calculated. Given the median home value in the area is $208,058, this translates into an annual rental income of approximately $11,040 ($920 x 12 months).
To determine the gross yield, we divide the annual rental income by the property value: $11,040 / $208,058 = 0.053 or 5.3%. This is the gross yield if the property were rented at the FMR rate.
On the other hand, using the market rent figure of $831 per month based on Census ACS data, the annual rental income would be $9,972 ($831 x 12 months). Dividing this by the median home value gives us a gross yield of $9,972 / $208,058 = 0.048 or 4.8%. This is the gross yield under market conditions.
The difference between these two gross yields highlights the impact of Section 8 versus market rents. At 5.3%, the FMR-based gross yield is higher than the market-based gross yield of 4.8%. However, considering the renter density of 10.8% and the fact that the days on market (DOM) is not available, it's important to evaluate which scenario is more realistic.
Given the low renter density, landlords might find it challenging to attract tenants willing to pay market rates. The lack of DOM data suggests either a very competitive market or a scarcity of rental listings, making it difficult to gauge the speed at which properties are leased. Therefore, the FMR rate of 5.3% could be more attainable due to the government subsidy backing Section 8 rentals, ensuring steady income regardless of market fluctuations.
In conclusion, while the market-based gross yield stands at 4.8%, the FMR-based gross yield of 5.3% appears more realistic for ZIP code 61075. Landlords and small-portfolio investors should consider the local rental dynamics and the potential stability offered by Section 8 when deciding on investment strategies.
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.