Location: Randolph County, IL | Metro: Jackson County, IL
| Unit Size | Monthly FMR |
|---|---|
| Studio | $710 |
| 1 Bedroom | $850 |
| 2 Bedrooms | $1,000 |
| 3 Bedrooms | $1,300 |
| 4 Bedrooms | $1,400 |
| 5 Bedrooms | $1,624 |
| 6 Bedrooms | $1,819 |
| 7 Bedrooms | $1,965 |
| 8 Bedrooms | $2,063 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 62280 reveals interesting insights for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a 2-bedroom apartment in ZIP 62280 for FY 2024 is set at an annualized rate of $880. This figure provides a benchmark for rental income expectations under the Section 8 program.
To calculate the implied gross yield, we use the median home value of $182,045 as a proxy for property investment cost. With an annualized FMR of $880, the implied gross yield is calculated as follows:
$880 / $182,045 = 0.0048 or 0.48%
This yield is significantly lower than typical market yields and reflects the limitations of relying solely on Section 8 rents for income generation. For context, if we were to compare this to a more conventional market rent scenario, we would need a specific market rent figure to perform the calculation accurately. However, given that the market rent is currently not available (N/A), we can only work with the provided Section 8 FMR.
ZIP 62280 has a renter density of 28.3%, indicating a moderate level of demand for rental properties. The lack of data on days on market (DOM) makes it challenging to predict how quickly a property might be leased, especially under the Section 8 program. Nevertheless, the low gross yield of 0.48% based on the Section 8 FMR suggests that landlords should expect minimal cash flow from rents alone when considering this ZIP code.
Given the median home value and the current Section 8 FMR, the realistic expectation for gross yield is the aforementioned 0.48%. This implies that landlords must factor in other sources of revenue or cost savings to make such investments viable. They could consider government subsidies, tax benefits, or reduced maintenance costs due to the oversight provided by the Section 8 program.
In conclusion, while the Section 8 program offers stability in terms of lease agreements and payment reliability, the gross yield of 0.48% derived from the FMR is notably low compared to typical market yields. Landlords and investors should carefully weigh these factors and consider additional incentives before making investment decisions in ZIP 62280.
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.