Location: Peoria, IL | Metro: Peoria, IL MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,070 |
| 1 Bedroom | $1,130 |
| 2 Bedrooms | $1,420 |
| 3 Bedrooms | $1,820 |
| 4 Bedrooms | $2,000 |
| 5 Bedrooms | $2,320 |
| 6 Bedrooms | $2,598 |
| 7 Bedrooms | $2,806 |
| 8 Bedrooms | $2,946 |
U.S. Census Bureau data (2024)
A landlord considering ZIP 61742 for a Section 8 investment must evaluate several factors to make an informed decision. The first step involves assessing whether the Fair Market Rent (FMR) of $970 for the fiscal year 2024 can cover the debt service on a property valued at $287,569. To determine this, calculate the monthly mortgage payment based on typical financing terms and compare it to the FMR.
If the monthly mortgage payment is less than or equal to $970, then the answer is yes; the FMR clears the debt service. However, if the monthly mortgage payment exceeds $970, the answer is no; the FMR does not sufficiently cover the debt service, making the investment financially unfeasible under Section 8 guidelines without additional rental income or subsidies.
The second consideration is the relationship between the market rent of $1,135 (as per Census ACS data) and the FMR. If the market rent is higher than the FMR, it suggests that landlords could potentially earn more from market-rate tenants than from those participating in Section 8. In this case, the decision would be it depends; the landlord must weigh the benefits of potentially higher market rents against the stability of Section 8 tenancy.
If the market rent is at or below the FMR, then the answer is yes; there is little financial incentive to seek market-rate tenants over Section 8 participants, and the investment aligns well with the program's financial parameters.
The final factor to consider is the demand for rental properties. With 8.4% of residents being renters and an unknown number of days on the market (DOM), the decision hinges on whether these figures indicate sufficient demand. Given the limited data, the answer is it depends. A deeper analysis into the local rental market dynamics, including vacancy rates and tenant turnover, is necessary. If the vacancy rate is low and tenant turnover is high, indicating strong demand, the answer leans towards yes. Conversely, if the vacancy rate is high, suggesting weak demand, the answer is no.
In conclusion, a landlord should proceed with caution when considering ZIP 61742 for a Section 8 investment. The financial viability hinges on the ability of the FMR to cover debt service and the comparison between FMR and market rent. Demand analysis, while challenging due to incomplete data, remains crucial for understanding the potential success of the investment.
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.