Location: Logan County, IL | Metro: Springfield, IL MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $750 |
| 1 Bedroom | $880 |
| 2 Bedrooms | $1,090 |
| 3 Bedrooms | $1,450 |
| 4 Bedrooms | $1,520 |
| 5 Bedrooms | $1,763 |
| 6 Bedrooms | $1,975 |
| 7 Bedrooms | $2,133 |
| 8 Bedrooms | $2,240 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 62548 reveals a nuanced picture when comparing the Federal Market Rent (FMR) and market rent figures against the median home value. The annualized FMR for a two-bedroom apartment in this area for fiscal year 2024 is $1070, while the Census ACS reports the market rent at $802.
To derive the gross yield, we first need to calculate the potential annual rental income. With an FMR of $1070 per month, the annual rental income would be $12,840. Dividing this by the median home value of $150,828 gives us an implied gross yield of approximately 8.5%. On the other hand, using the market rent figure of $802 per month, the annual rental income would be $9,624. This translates into an implied gross yield of about 6.4% when compared to the median home value.
Given the 15.3% renter density in ZIP 62548, it's important to note that the market rent scenario is more realistic. The lower renter density suggests that there might be fewer tenants willing to pay the higher FMR rates, making the market rent a better indicator of what landlords can realistically expect. Additionally, the lack of data on days on market (DOM) means we cannot accurately gauge how quickly properties might be leased, but it further supports the idea that market conditions should guide expectations rather than government-set rates.
In conclusion, the gross yield derived from the market rent ($802 per month) is more reflective of actual investment performance in ZIP 62548. Landlords and small-portfolio investors should consider this yield as a baseline for their financial projections, recognizing that the FMR-based yield may be overly optimistic given the local rental market dynamics.
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.