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 | $800 |
| 1 Bedroom | $880 |
| 2 Bedrooms | $1,070 |
| 3 Bedrooms | $1,480 |
| 4 Bedrooms | $1,780 |
| 5 Bedrooms | $2,065 |
| 6 Bedrooms | $2,313 |
| 7 Bedrooms | $2,498 |
| 8 Bedrooms | $2,623 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,480 | $282,337 | 0.52% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 63766 reveals an interesting scenario for landlords and small-portfolio investors. The Federal Market Rent (FMR) for a 2-bedroom apartment in this area, as of FY 2024, is set at $830 per month. This translates into an annualized rental income of $9,960. When compared to the median home value of $250,363, the implied gross yield based on the FMR is approximately 3.98%. This calculation is derived by dividing the annual rental income by the property value.
In contrast, the market rent for a 2-bedroom apartment in ZIP 63766 is reported at $1,125 per month according to the Census ACS. This figure annualizes to $13,500, resulting in a significantly higher implied gross yield of 5.40%. This yield is calculated similarly by taking the annual rental income and dividing it by the median home value.
Given the 9.5% renter density in ZIP 63766, it's important to consider the practical implications of these yields. While the market rent scenario presents a more attractive gross yield, the reality of the situation is that only a fraction of the housing stock is occupied by renters. Moreover, the N/A-day DOM (Days on Market) suggests that there might be inefficiencies or inaccuracies in the local rental market data, which could affect the reliability of the market rent figure.
The FMR-based yield, while lower at 3.98%, is a more conservative estimate and reflects the government-set rates that Section 8 participants are likely to pay. It provides a stable and predictable income stream, which can be particularly valuable for landlords and investors looking to mitigate risk. However, it's also worth noting that the actual performance of properties under Section 8 can vary based on factors such as property management, maintenance costs, and the overall economic climate.
In summary, while the market rent scenario offers a higher gross yield of 5.40%, the FMR-based yield of 3.98% is more reflective of the realities faced by Section 8 landlords in ZIP 63766. Investors should weigh these figures against the local rental market dynamics and their own risk tolerance when considering Section 8 participation in this area.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.