Location: Greene County, IL | Metro: Macoupin County, IL HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $710 |
| 1 Bedroom | $710 |
| 2 Bedrooms | $930 |
| 3 Bedrooms | $1,130 |
| 4 Bedrooms | $1,420 |
| 5 Bedrooms | $1,647 |
| 6 Bedrooms | $1,845 |
| 7 Bedrooms | $1,993 |
| 8 Bedrooms | $2,093 |
U.S. Census Bureau data (2024)
The analysis for ZIP code 62649 reveals a complex picture when it comes to Section 8 properties. The Fair Market Rent (FMR) for a 2-bedroom apartment in this area, as set by HUD for FY 2024, is $990 per month. Meanwhile, the Census ACS indicates a market rent of $732 for the same type of unit.
Given the absence of a median home value in the dataset, we cannot calculate a direct capitalization rate (cap-rate) for this ZIP code. However, we can compare the implied gross yields from the two different rent scenarios. If we assume a property value based on typical metrics used in Section 8 analysis, such as multiplying the monthly rent by 100 to estimate the price, we can derive a comparative yield.
For the FMR scenario, annualizing the $990 rent gives us an annual rental income of $11,880. Using the assumed multiplier of 100 times the monthly rent, the estimated property value would be $99,000. This implies a gross yield of approximately 12%, calculated as $11,880 divided by $99,000.
In contrast, using the market rent of $732, the annual rental income is $8,784. Applying the same multiplier to get an estimated property value of $73,200, the gross yield drops to about 12%. Here, the gross yield calculation remains the same due to the proportional relationship between the rents and the assumed property values.
However, considering the 9.1% renter density in ZIP 62649, it's important to note that the actual occupancy rates might affect these yields. A lower-than-average renter density suggests that finding tenants could be challenging, potentially reducing the effective rental income below the FMR level. Additionally, the lack of data on the days-on-market (DOM) makes it difficult to assess how quickly properties are leased up, which is critical for cash flow projections.
Between the FMR and market rent scenarios, the market rent figure is likely more reflective of reality, given the low renter density. Landlords should prepare for potential vacancy periods and understand that the FMR may not translate into consistent occupancy, thereby affecting the overall gross yield. Investors should also consider the broader economic context of the area and the specific dynamics of the rental market before making investment 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.