Location: Jasper County, IL | Metro: Cumberland County, IL
| Unit Size | Monthly FMR |
|---|---|
| Studio | $690 |
| 1 Bedroom | $750 |
| 2 Bedrooms | $930 |
| 3 Bedrooms | $1,150 |
| 4 Bedrooms | $1,480 |
| 5 Bedrooms | $1,717 |
| 6 Bedrooms | $1,923 |
| 7 Bedrooms | $2,077 |
| 8 Bedrooms | $2,181 |
U.S. Census Bureau data (2024)
The analysis for ZIP code 62445 reveals a distinct picture regarding the potential returns for landlords and small-portfolio investors involved in Section 8 properties. To start, let's look at the Fair Market Rent (FMR) for a two-bedroom property, which stands at $920 per month for FY 2026, based on metropolitan standards. This translates into an annualized rental income of $11,040.
Using the median home value of $183,467, we can calculate the implied gross yield for a Section 8 property. The gross yield is derived by dividing the annual rental income by the property value. For the FMR scenario, the gross yield is approximately 6%. This calculation is straightforward: $11,040 divided by $183,467 equals roughly 6%.
Next, let's consider the market rent scenario, where the average monthly rent is $392, according to Census ACS data. This annualizes to $4,704, significantly lower than the FMR. The gross yield here would be about 2.5%, calculated by dividing $4,704 by $183,467.
The stark contrast between these two yields—6% for the FMR and 2.5% for the market rent—highlights the importance of understanding the local rental environment and the specific terms of Section 8 contracts. Given that only 6.6% of the population in ZIP 62445 are renters, it becomes evident that the demand for rental properties, particularly those under Section 8, might be limited. However, the lack of available data on days on market (DOM) makes it challenging to fully assess the liquidity of rental properties in this area.
Considering the higher gross yield from the FMR scenario, it appears more favorable for landlords and small-portfolio investors. However, it's crucial to recognize that this yield is contingent upon securing a Section 8 contract, which may come with its own set of challenges and considerations, such as tenant selection and maintenance requirements.
In summary, while the FMR provides a better gross yield, the actual feasibility of achieving this return depends on several factors, including the availability of Section 8 contracts and the broader rental market dynamics. Investors should carefully evaluate these aspects before making any decisions.
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.