Location: Logan County, IL | Metro: Decatur, IL MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $760 |
| 1 Bedroom | $770 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,250 |
| 4 Bedrooms | $1,680 |
| 5 Bedrooms | $1,949 |
| 6 Bedrooms | $2,183 |
| 7 Bedrooms | $2,358 |
| 8 Bedrooms | $2,476 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 61749 provides a clear picture of the potential returns for landlords and small-portfolio investors considering this area. The Fair Market Rent (FMR) for a 2-bedroom apartment in this ZIP code for FY 2024 is set at $940 per month, while the Census ACS reports the market rent for a similar unit at $825 per month. Using these figures against the median home value of $127,313, we can calculate the implied gross yields for both scenarios.
First, let's annualize the FMR. At $940 per month, the annual rent would be $11,280. This results in an implied gross yield of approximately 8.86% when compared to the median home value of $127,313. In contrast, using the market rent figure of $825 per month, the annual rent would be $9,900, leading to an implied gross yield of around 7.78%. These calculations provide a direct comparison between the two rental scenarios.
Given the 5.4% renter density in ZIP 61749, it is important to consider the likelihood of securing tenants under the Section 8 program versus the open market. While the higher FMR of $940 per month might seem attractive, the reality of tenant acquisition and retention must be factored into the decision-making process. The N/A-day DOM (Days on Market) indicates that there is insufficient data to determine how quickly properties are rented out, which adds uncertainty to the analysis.
In conclusion, the higher implied gross yield of 8.86% based on the FMR is theoretically more favorable. However, the actual gross yield of 7.78% based on market rent reflects the current economic conditions and tenant preferences more accurately. Landlords and investors should weigh the benefits of the higher FMR against the challenges of lower renter density and uncertain DOM metrics. While the Section 8 program offers a stable income source, the market rent scenario presents a more realistic expectation for gross yield in ZIP 61749.
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.