Location: St. Francois County, MO | Metro: St. Louis, MO-IL HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $770 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $1,000 |
| 3 Bedrooms | $1,230 |
| 4 Bedrooms | $1,390 |
| 5 Bedrooms | $1,612 |
| 6 Bedrooms | $1,805 |
| 7 Bedrooms | $1,949 |
| 8 Bedrooms | $2,046 |
U.S. Census Bureau data (2024)
The ZIP code 63087 is situated in a suburban neighborhood characterized by a relatively small population of 1,066 residents. The area has a modest rental market, with only 17.0% of the population being renters. This indicates a primarily owner-occupied community, suggesting that rental properties might be less numerous but also potentially more valuable due to their scarcity. The median household income in the area is $60,313, which places it above the national average, indicating a financially stable community. However, the median home value stands at $280,530, reflecting the overall cost of living in the region.
Moving into the specifics of the rental market, the Fair Market Rent (FMR) for ZIP 63087 as of the fiscal year 2024 is set at $900. This is notably higher than the reported market rent of $575 based on Census ACS data. The discrepancy between the FMR and the actual market rent suggests a potential opportunity for landlords who can capitalize on the government's willingness to reimburse higher rents through the Section 8 program. This could mean that landlords in 63087 have the ability to charge closer to the FMR rate without losing tenants, as long as they are willing to participate in the Section 8 program.
The question then becomes whether this ZIP code is better suited for a hands-off voucher operator or a hands-on value-add buyer. Given the high FMR compared to the current market rent, a hands-on value-add buyer could find significant opportunities to improve existing properties and justify higher rents closer to the FMR. This would require an investment in property improvements but could yield higher returns over time. On the other hand, a hands-off operator could still benefit from the Section 8 program's reimbursement rates, especially if they already own properties in good condition that meet the necessary standards. However, such an approach would likely result in lower immediate cash flows, as the reimbursement rate would not fully compensate for the higher maintenance and management costs associated with hands-off operations.
In conclusion, ZIP 63087 presents a balanced environment where both hands-off and hands-on strategies can succeed. For those willing to invest in property upgrades, there is a clear path to higher rental incomes aligned with the FMR. Conversely, for operators looking to minimize active management, the ZIP code still offers a stable, if lower, return on investment through the Section 8 program's financial support.
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.