Location: Marion County, IL | Metro: Jefferson County, IL
| Unit Size | Monthly FMR |
|---|---|
| Studio | $720 |
| 1 Bedroom | $770 |
| 2 Bedrooms | $970 |
| 3 Bedrooms | $1,200 |
| 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 Section 8 cap rate analysis for ZIP code 62889 reveals a challenging investment landscape due to limited data points. The Federal Market Rent (FMR) for a two-bedroom unit in fiscal year 2026 is set at $970 per month, based on metropolitan area standards. However, the market rent for the area is currently not available, as well as the median home value.
To derive an implied gross yield, we must first consider the FMR scenario. Assuming an annualized FMR of $11,640 (i.e., $970 multiplied by 12 months), the implied gross yield would be calculated by dividing this annual rent by the property value. Without the median home value, we cannot provide a precise gross yield figure, but the implication is that the rental income under the FMR would be relatively low compared to typical market rents, especially if property values in the area are high.
In contrast, the lack of market rent data leaves us unable to calculate a gross yield based on current market conditions. This absence of information suggests that the local rental market might be less active or less documented, which could affect the liquidity and appeal of the area for investors.
Given the 21.0% renter density, it's clear that a significant portion of the population is already renting, which supports the viability of rental properties in the area. However, the unknown median home value and the non-available days on market (DOM) figures complicate the assessment of potential returns and property turnover rates.
While the FMR provides a fixed income guarantee, it also implies a lower gross yield relative to what might be achievable through market rent. Therefore, if market rents were higher than the FMR, the gross yield would likely be more favorable for investors. Until more accurate market rent and median home value data become available, the FMR scenario remains the most concrete basis for estimating potential returns in ZIP 62889.
The analysis indicates that the FMR-based gross yield will be lower than what could potentially be achieved with market rents. However, the certainty of the FMR can be appealing to risk-averse investors, despite the lower returns. For those willing to navigate the uncertainty, exploring the market beyond Section 8 could offer better yields, though this comes with greater risk and less predictability.
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.