Location: Montgomery County, IL | Metro: Springfield, IL MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $770 |
| 1 Bedroom | $880 |
| 2 Bedrooms | $1,110 |
| 3 Bedrooms | $1,460 |
| 4 Bedrooms | $1,550 |
| 5 Bedrooms | $1,798 |
| 6 Bedrooms | $2,014 |
| 7 Bedrooms | $2,175 |
| 8 Bedrooms | $2,284 |
U.S. Census Bureau data (2024)
The analysis of ZIP code 62558 for landlords and small-portfolio investors reveals a significant gap between the Fair Market Rent (FMR) set by HUD and the actual market rent based on Census data. The FMR for ZIP 62558 in fiscal year 2024 is $1070, while the market rent stands at $903. This creates a $167 difference, or approximately 18%.
The FMR being higher than the market rent suggests a yield play for landlords who accept Section 8 vouchers. Since voucher tenants pay a portion of their income towards rent, landlords receive the remainder from the government, effectively subsidizing the rent above the market rate. This makes properties in ZIP 62558 attractive for investors looking to generate higher yields without setting rents above what voucher holders can afford.
In ZIP 62558, the median home value is $187,265, indicating a middle-class neighborhood. The median income of $81,106 supports the ability of residents to afford homes at this level. However, the gap between FMR and market rent highlights the financial advantage of having voucher tenants, who can occupy units at rates that are still profitable for landlords despite being below the open-market levels.
The zip code has a relatively low percentage of renters at 16.2%. This suggests that homeownership is prevalent, which could indicate stability and a strong local economy. For investors, this environment offers a mix of opportunities for both rental and potential sale of properties, depending on market conditions and individual investment strategies.
Given these factors, ZIP 62558 presents a compelling case for real estate investments, especially those focused on leveraging the Section 8 program to enhance profitability.
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.