Location: Randolph County, IL | Metro: St. Louis, MO-IL HUD Metro FMR Area
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $770 |
| 1 Bedroom | $840 |
| 2 Bedrooms | $1,090 |
| 3 Bedrooms | $1,370 |
| 4 Bedrooms | $1,710 |
| 5 Bedrooms | $1,984 |
| 6 Bedrooms | $2,222 |
| 7 Bedrooms | $2,400 |
| 8 Bedrooms | $2,520 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,090 | $213,479 | 0.51% | F |
| 3BR | $1,370 | $288,907 | 0.47% | F |
| 4BR | $1,710 | $351,725 | 0.49% | F |
U.S. Census Bureau data (2024)
The classification of ZIP 62278 (Red Bud, IL) on the axes of yield and stability reveals a unique investment opportunity. On the yield axis, the Fair Market Rent (FMR) for the fiscal year 2024 is set at $990, significantly higher than the market rent of $875. This discrepancy suggests a potential for higher rental income relative to market rates, especially if landlords can secure tenants willing to pay closer to the FMR. Additionally, the median home value of $252,667 provides a solid base for property investments, indicating that there is a reasonable capital value underlying the rental opportunities.
Moving to the stability axis, ZIP 62278 presents a mixed picture. The percentage of renters is relatively low at 20.3%, which could imply a less stable tenant pool and potentially higher vacancy rates. However, the average household income of $79,688 suggests that there is financial strength among residents, which could support a robust rental market despite the lower percentage of renters. The lack of data on the number of days on market (DOM) makes it challenging to assess how quickly properties might be rented out, but the income figure provides some reassurance about the ability of residents to afford housing.
Based on these figures, ZIP 62278 does not clearly fall into a high-yield/low-stability 'flip-style' market or a steady-cashflow zone. Instead, it represents an area where there is potential for above-market rental yields due to the favorable FMR, but the stability is somewhat compromised by the low percentage of renters. Landlords should be prepared for possible fluctuations in occupancy rates while leveraging the strong income levels to attract reliable tenants. This makes ZIP 62278 a moderate-risk, moderate-reward investment zone, suitable for those who are willing to manage properties actively and can handle occasional vacancies.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.