Location: St. Francois County, MO | Metro: Iron County, MO
| Unit Size | Monthly FMR |
|---|---|
| Studio | $820 |
| 1 Bedroom | $970 |
| 2 Bedrooms | $1,110 |
| 3 Bedrooms | $1,360 |
| 4 Bedrooms | $1,640 |
| 5 Bedrooms | $1,902 |
| 6 Bedrooms | $2,130 |
| 7 Bedrooms | $2,300 |
| 8 Bedrooms | $2,415 |
U.S. Census Bureau data (2024)
The analysis of Section 8 cap rates for ZIP code 63656 provides a clear picture of potential investment yields based on the Fair Market Rent (FMR) and market rent figures. Using the annualized 2BR FMR of $1,010 for fiscal year 2026 and the median home value of $125,625, we can calculate an implied gross yield. The annual rent revenue at the FMR would be $12,120, leading to a gross yield of approximately 9.65% when divided by the median home value. This calculation assumes that the property can be rented out at the full FMR without vacancy.
In contrast, using the Census ACS reported market rent of $525, the annual rent revenue drops to $6,300, resulting in a significantly lower gross yield of about 5.01%. This scenario reflects a more conservative estimate of rental income, potentially factoring in higher vacancy rates or lower rental demand.
The gross-yield comparison between these two scenarios is stark, with the FMR-based yield being nearly twice as high as the market rent-based yield. However, the choice of which figure to use depends largely on the local rental market dynamics and the specific characteristics of the investment property.
Given the 15.9% renter density in ZIP 63656, it's important to consider the likelihood of securing tenants willing to pay the higher FMR rate. The low renter density suggests that the majority of residents might prefer homeownership, which could impact the ability to consistently rent properties at the FMR level. Additionally, the N/A-day Days on Market (DOM) indicates incomplete data regarding how quickly properties are typically leased, which adds another layer of uncertainty to the analysis.
While the FMR-based gross yield of 9.65% represents an attractive return, the more realistic market rent-based gross yield of 5.01% aligns better with the observed rental density. Investors should lean towards the market rent figure unless they have reason to believe that the property will attract Section 8 tenants at the higher FMR rate, such as through specific property management strategies or unique property features.
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.