Location: La Salle County, IL | Metro: La Salle County, IL
| Unit Size | Monthly FMR |
|---|---|
| Studio | $700 |
| 1 Bedroom | $770 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,310 |
| 4 Bedrooms | $1,620 |
| 5 Bedrooms | $1,879 |
| 6 Bedrooms | $2,104 |
| 7 Bedrooms | $2,272 |
| 8 Bedrooms | $2,386 |
U.S. Census Bureau data (2024)
A decision tree for whether to invest in ZIP code 61370 for Section 8 properties hinges on three key questions:
1. Does the Fair Market Rent (FMR) of $990 cover the debt service on a property valued at $222,738?
Yes: The FMR of $990 per month is sufficient to cover the debt service on a property priced at $222,738. This indicates that the rental income can meet the mortgage obligations, making it financially viable.
No: If the FMR does not cover the debt service, purchasing in this area would not be advisable. The financial burden would outweigh the benefits, leading to potential losses.
It Depends: Further analysis is required if the margin between the FMR and debt service is minimal. Consideration must be given to additional costs such as maintenance and insurance.
2. How does the market rent of $900 compare to the FMR?
Above: If the market rent exceeds the FMR, it suggests that the property could potentially generate higher returns if rented out to non-Section 8 tenants. However, for pure Section 8 investments, this comparison is less relevant.
At: Market rent matching the FMR means the property will likely be rented at the maximum allowable rate under Section 8, which is ideal for maximizing income without exceeding the subsidy limits.
Below: If the market rent is below the FMR, there might be an opportunity to attract Section 8 tenants who would benefit from the higher subsidy amount. However, this also indicates a lower overall market demand for rentals at the FMR level.
3. Is the combination of 12.1% renters and N/A-day days on the market indicative of sufficient demand?
Yes: A 12.1% rental rate, coupled with a short time on the market (N/A implies quick turnover), suggests strong demand for rentals in the area. Landlords can expect to fill vacancies promptly, ensuring steady cash flow.
No: If the rental rate is low and the days on the market are long, it signifies weak demand. This would make it difficult to find and retain tenants, leading to potential vacancies and reduced income.
It Depends: Given the limited information on days on the market, the decision relies heavily on other factors such as local employment rates and economic stability. A deeper dive into these aspects is necessary to determine the sustainability of the investment.
In conclusion, investing in ZIP 61370 for Section 8 properties is viable if the FMR sufficiently covers debt service, the market rent aligns closely with the FMR, and there is demonstrable tenant demand. These conditions ensure a stable and profitable rental environment.
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.