Location: Stoddard County, MO | Metro: Cape Girardeau, MO-IL MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $710 |
| 1 Bedroom | $740 |
| 2 Bedrooms | $960 |
| 3 Bedrooms | $1,250 |
| 4 Bedrooms | $1,500 |
| 5 Bedrooms | $1,740 |
| 6 Bedrooms | $1,949 |
| 7 Bedrooms | $2,105 |
| 8 Bedrooms | $2,210 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 63771 (Oran, MO) reveals a distinct disparity between the Federal Market Rent (FMR) and the actual market rent. Using the annualized 2BR FMR of $950 for fiscal year 2024, the implied gross yield is calculated as follows:
$950 annualized rent divided by the median home value of $157,116 yields an implied gross-yield of approximately 0.60%. This figure is derived directly from the provided data and represents the income potential if a property were rented at the FMR rate.
In contrast, using the market rent of $670 (from Census ACS), the implied gross-yield drops significantly to about 0.42%. This lower yield reflects the current rental market conditions in Oran, MO, where the average market rent is substantially below the FMR.
Given the renter density of 22.6%, it's important to consider the local demand for rental properties. The N/A-day DOM (Days on Market) indicates that there isn't sufficient data to determine how quickly rental units are typically leased in this area, which could suggest either a stable or unpredictable rental market.
The 0.60% gross-yield based on FMR is less likely to be realized due to the limited rental market demand represented by the 22.6% renter density. Landlords and small-portfolio investors should focus on the more realistic 0.42% gross-yield based on the market rent of $670 per month for a 2BR unit. This scenario aligns better with the observed rental market dynamics in ZIP 63771.
To summarize, while the FMR offers a higher theoretical gross-yield, the actual market conditions indicate that a more conservative estimate based on the market rent is prudent for investment planning in Oran, MO.
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.