Location: Fayette County, IL | Metro: Fayette County, IL
| Unit Size | Monthly FMR |
|---|---|
| Studio | $720 |
| 1 Bedroom | $770 |
| 2 Bedrooms | $970 |
| 3 Bedrooms | $1,250 |
| 4 Bedrooms | $1,460 |
| 5 Bedrooms | $1,694 |
| 6 Bedrooms | $1,897 |
| 7 Bedrooms | $2,049 |
| 8 Bedrooms | $2,151 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 62880 reveals a nuanced investment landscape. The Fair Market Rent (FMR) for a two-bedroom apartment is set at $920 per month for FY 2026, while the market rent stands at $1,018 per month according to Census ACS data. To understand the implications for potential investors, let's annualize these figures against the median home value of $158,866.
Using the FMR of $920, the annual rental income would be $11,040. This translates to an implied gross yield of approximately 7%. In contrast, the market rent of $1,018 results in an annual rental income of $12,216, implying a gross yield of around 7.7%.
Given the 15.4% renter density in ZIP 62880, it is important to consider the practicality of achieving these yields. While the market rent suggests a slightly higher gross yield, the reality of the rental market must be taken into account. The fact that the days on market (DOM) is listed as N/A indicates either a very efficient rental market or a lack of comprehensive data. However, the low renter density implies that there may be limited demand for rental properties, making it challenging to consistently achieve market rents.
The FMR scenario, with its lower but more stable rental income, is likely more realistic for most investors. Section 8 tenants provide a guaranteed and stable source of income, which can be particularly appealing in areas with low renter density. Despite the slightly lower gross yield, the reliability of the income stream can outweigh the risk associated with fluctuating market rents.
In conclusion, while the market rent offers a marginally better gross yield, the FMR scenario presents a more reliable and predictable income for investors in ZIP 62880. This makes it a safer bet for those looking to enter the Section 8 housing market in this area.
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.