Location: Peoria, IL | Metro: Bloomington, IL MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,110 |
| 1 Bedroom | $1,170 |
| 2 Bedrooms | $1,510 |
| 3 Bedrooms | $1,980 |
| 4 Bedrooms | $1,990 |
| 5 Bedrooms | $2,308 |
| 6 Bedrooms | $2,585 |
| 7 Bedrooms | $2,792 |
| 8 Bedrooms | $2,932 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 61732 reveals a clear disparity between the federal market rent (FMR) and the actual market rent. The annualized 2BR FMR for FY 2024 stands at $1110, while the Census ACS reports the market rent at $1,228. Using these figures against the median home value of $242,896, we can derive two distinct gross yields.
First, considering the FMR of $1110, the annual rental income would be $13,320. This translates into an implied gross yield of approximately 5.5% when divided by the median home value ($242,896). On the other hand, using the market rent figure of $1,228, the annual rental income increases to $14,736, resulting in a higher gross yield of about 6.1%.
Given the 9.3% renter density in ZIP 61732, it's important to note that the market rent scenario appears more realistic. Renter density suggests a lower proportion of the population is likely to rely solely on government subsidies, making the higher market rent a more probable scenario for landlords and small-portfolio investors. However, the lack of data on days on market (DOM) complicates a precise assessment of vacancy rates and their impact on net operating income (NOI).
In conclusion, the gross yield based on market rent is 6.1%, compared to the FMR-based yield of 5.5%. Investors should consider the local rental market dynamics, including renter density and potential competition from unsubsidized tenants, when determining the most appropriate gross yield for their investment calculations in ZIP 61732.
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.