Location: St. Louis, MO | Metro: St. Louis, MO-IL HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,170 |
| 1 Bedroom | $1,210 |
| 2 Bedrooms | $1,480 |
| 3 Bedrooms | $1,900 |
| 4 Bedrooms | $2,190 |
| 5 Bedrooms | $2,540 |
| 6 Bedrooms | $2,845 |
| 7 Bedrooms | $3,073 |
| 8 Bedrooms | $3,227 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 63043, Maryland Heights, MO, provides a clear picture of potential returns for landlords and small-portfolio investors. To start, let's consider the Federal Market Rent (FMR) for a two-bedroom apartment, which is set at $1380 annually for fiscal year 2024. When compared to the median home value of $258,730, this annual rental income translates into an implied gross yield of approximately 0.53%. The calculation is straightforward: $1380 divided by $258,730 equals 0.0053, or 0.53%.
Next, let's look at the Zillow Observed Rent Index (ZORI), which indicates a market rent of $1,490 per month for the same property type. This figure suggests a higher annual rental income of $17,880. Using the median home value again, this scenario implies a gross yield of about 6.91%. The calculation here is $17,880 divided by $258,730, resulting in 0.0691, or 6.91%.
The stark difference between these two yields highlights the importance of understanding the local rental market dynamics. With a renter density of 30.4%, it's evident that a significant portion of the population in Maryland Heights relies on rental housing. This high demand can support higher rental rates, making the ZORI-based gross yield of 6.91% more realistic in practice.
Furthermore, the Days on Market (DOM) statistic of 9 days suggests that rental properties in this area are quickly occupied once they become available. This short DOM period supports the idea that landlords can expect a steady stream of tenants willing to pay market rates rather than the lower FMR rate.
In conclusion, while the Section 8 program offers a guaranteed rental income at the FMR rate, the actual market conditions in ZIP 63043 point towards a higher gross yield based on prevailing market rents. Landlords should factor in the strong tenant demand and quick occupancy rates when evaluating their investment opportunities 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.