Location: Decatur, IL | Metro: Decatur, IL MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $760 |
| 1 Bedroom | $770 |
| 2 Bedrooms | $970 |
| 3 Bedrooms | $1,250 |
| 4 Bedrooms | $1,540 |
| 5 Bedrooms | $1,786 |
| 6 Bedrooms | $2,000 |
| 7 Bedrooms | $2,160 |
| 8 Bedrooms | $2,268 |
U.S. Census Bureau data (2024)
A landlord considering ZIP 62549 for Section 8 investments must follow a structured decision-making process based on the financial metrics available. Here's how to proceed:
1) Does FMR $910 clear debt service on a $194,697 property?
Yes. The Fair Market Rent (FMR) of $910 is sufficient to cover the debt service on a property valued at $194,697. This means that if you can secure a mortgage rate that aligns with typical rental yields, the monthly income from a Section 8 tenant will be enough to meet your monthly mortgage obligations. However, this assumes no significant property taxes or insurance costs that could eat into the margin.
No. If your debt service exceeds $910 per month, then the answer is no. Section 8 tenants will not generate enough income to cover the costs associated with owning a property valued at $194,697. In this scenario, you would need to either find a lower-cost property or explore other sources of income to supplement the rent.
It depends. If the difference between the FMR and your debt service is marginal, the decision hinges on additional factors such as the reliability of Section 8 payments, the potential for property appreciation, and the landlord's risk tolerance. A small gap might be manageable if the landlord is willing to accept some financial strain or has a plan to increase the property's value over time.
2) Is market rent $749 above, at, or below FMR?
Above. If the market rent of $749 is below the FMR of $910, then Section 8 properties are undervalued relative to the market. This suggests an opportunity for landlords who can leverage the higher FMR to subsidize their investment, potentially increasing their profit margins when the property is not occupied by a Section 8 tenant.
At. If the market rent matches the FMR, then there is no premium to be gained from renting to Section 8 tenants versus market-rate tenants. This makes the decision purely about the demand for housing and the landlord's preference for subsidized vs. non-subsidized tenants.
Below. If the market rent is below the FMR, landlords might consider whether the additional administrative burden of managing a Section 8 property is worth the higher guaranteed rent. This situation can still be viable if the landlord values the stability and predictability of Section 8 payments.
3) Are 17.3% renters + N/A-day DOM enough demand?
Yes. With 17.3% of the population being renters, there is a moderate level of demand for rental properties. The lack of data on days on market (DOM) suggests that the local real estate market is stable, and properties typically do not stay vacant for long periods. This combination supports a positive outlook for landlords who can manage the administrative requirements of Section 8.
No. If the percentage of renters is low, or if there is evidence of high DOM indicating difficulty in leasing properties, then the answer is no. Landlords should look for areas with higher rental demand to ensure steady occupancy and income.
It depends. Given the limited data on DOM, the decision largely rests on the landlord's assessment of the local rental market. If they believe that the 17.3% renter base is robust and that Section 8 tenants will quickly occupy any vacancies, then the investment could be worthwhile. Otherwise, the landlord should seek additional insights into the rental market dynamics before making a final decision.
In conclusion, ZIP 62549 presents a viable option for Section 8 investments if the landlord can secure a property with a
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.