Location: Cape Girardeau, MO | Metro: Cape Girardeau, MO-IL MSA
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $790 |
| 1 Bedroom | $860 |
| 2 Bedrooms | $1,050 |
| 3 Bedrooms | $1,450 |
| 4 Bedrooms | $1,760 |
| 5 Bedrooms | $2,042 |
| 6 Bedrooms | $2,287 |
| 7 Bedrooms | $2,470 |
| 8 Bedrooms | $2,594 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,050 | $158,147 | 0.66% | D |
| 3BR | $1,450 | $237,863 | 0.61% | D |
| 4BR | $1,760 | $326,556 | 0.54% | F |
| 5BR | $2,042 | $493,231 | 0.41% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP 63701 in Cape Girardeau, MO, provides valuable insights into investment potential. For a two-bedroom property, the Fair Market Rent (FMR) for fiscal year 2024 is set at $960 per month. This translates to an annualized income of $11,520. In contrast, the market rent as indicated by the Zillow Observed Rent Index (ZORI) stands at $1,082 per month, equating to an annual rental income of $12,984.
To derive the gross yield for each scenario, we consider the median home value in the area, which is $243,522. The gross yield based on the FMR is calculated as follows:
Given the 39.0% renter density and a 23-day Days on Market (DOM), the market rent scenario appears more realistic. The higher renter density suggests a robust demand for rental properties, while the relatively low DOM indicates that properties are likely to be rented quickly, reducing vacancy rates and increasing the likelihood of achieving market rents.
The difference between the two gross yields is significant, with the market rent scenario offering a 5.33% yield compared to the 4.73% yield under the FMR. Investors should note that the actual net operating income (NOI) will depend on various factors such as maintenance costs, property taxes, and insurance. However, the gross yield comparison clearly shows that aiming for market rent can result in a higher return on investment.
In conclusion, while the FMR offers a baseline for rental income, the market rent presents a more optimistic and likely achievable yield. Landlords and small-portfolio investors in ZIP 63701 should consider these figures when evaluating potential investments and setting rental prices.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.