Location: St. Louis, MO | Metro: St. Louis, MO-IL HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $780 |
| 1 Bedroom | $810 |
| 2 Bedrooms | $990 |
| 3 Bedrooms | $1,270 |
| 4 Bedrooms | $1,470 |
| 5 Bedrooms | $1,705 |
| 6 Bedrooms | $1,910 |
| 7 Bedrooms | $2,063 |
| 8 Bedrooms | $2,166 |
U.S. Census Bureau data (2024)
A decision tree for evaluating ZIP 62201 for Section 8 investments hinges on three key factors: the Fair Market Rent (FMR), the relationship between FMR and market rent, and the rental demand in the area. Let's break down these factors.
1. Does the FMR of $990 cover the debt service on a property valued at $56,231?
Yes: The FMR of $990 is sufficient to cover the debt service on a property valued at $56,231. This means that landlords can expect to receive enough income from Section 8 tenants to meet their mortgage payments and other financing obligations. However, this does not account for maintenance costs or other expenses.
No: If the FMR of $990 does not cover the debt service on a property valued at $56,231, then landlords should reconsider investing in this ZIP code. The financial viability of the investment would be compromised if the rent does not sufficiently cover the costs associated with owning the property.
It Depends: If the landlord has additional sources of income or if the property is expected to generate income beyond the FMR, such as through utility allowances or additional services, then the investment might still be viable despite the FMR being slightly below the required debt service coverage. However, this requires careful financial planning and analysis.
2. How does the market rent of $713 compare to the FMR?
Above: If the market rent were above the FMR, it would indicate that landlords could potentially earn higher rents from non-Section 8 tenants, which could provide an additional incentive to invest in the area. However, since the market rent is below the FMR, this is not the case for ZIP 62201.
At: Not applicable in this scenario, as the market rent is below the FMR.
Below: The market rent of $713 is below the FMR of $990, which suggests that landlords participating in the Section 8 program could earn more than they would from market-rate tenants. This makes Section 8 properties more attractive compared to non-subsidized rentals.
3. Is there enough demand with 48.8% of residents renting and N/A-day days on the market (DOM)?
Yes: With 48.8% of residents renting, there is a significant portion of the population who are already in the rental market, indicating a steady demand for rental units. The fact that the days on the market is listed as N/A suggests that listings are moving quickly, further supporting the idea that demand is high relative to supply.
No: Not applicable given the available data. The percentage of renters and the quick turnover of listings suggest a healthy demand.
It Depends: While the percentage of renters is substantial, the lack of specific DOM data means that landlords must consider other factors, such as vacancy rates and the competition from other rental properties, before making a final decision. Additionally, understanding the local economy and employment situation will help determine whether the demand is likely to continue.
In summary, for ZIP 62201, the FMR covers debt service on a $56,231 property, the market rent is below the FMR, and there is a significant rental demand. These conditions make the ZIP code a favorable location for Section 8 investments, assuming the landlord can manage the property effectively and the demand remains stable.
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.