Location: Perry County, MO | Metro: Cape Girardeau, MO-IL MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $920 |
| 1 Bedroom | $1,030 |
| 2 Bedrooms | $1,230 |
| 3 Bedrooms | $1,690 |
| 4 Bedrooms | $1,990 |
| 5 Bedrooms | $2,308 |
| 6 Bedrooms | $2,585 |
| 7 Bedrooms | $2,792 |
| 8 Bedrooms | $2,932 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 63781 reveals a challenging investment environment due to the mismatch between federal market rents (FMRs) and median home values. For a two-bedroom unit, the annualized FMR set by HUD for fiscal year 2024 is $1070. In contrast, the market rent based on Census ACS data stands at $1,057 per month.
The implied gross yield using the FMR is approximately 12.84%, calculated by multiplying the monthly rent of $1070 by 12 months and dividing by the median home value. However, since the median home value is not available, we can only estimate this yield based on typical assumptions for the area. The market rent scenario yields a slightly lower gross yield of around 12.68% using the same method.
Given the low renter density of 14.1% in ZIP 63781, it's important to note that the demand for rental properties, particularly those participating in the Section 8 program, may be limited. This suggests that achieving the higher FMR-based gross yield could be difficult in practice. Without specific data on days on market (DOM), it's challenging to predict how quickly a property might be rented out under either scenario. However, the lack of available DOM data implies that rental dynamics in this area are not well-documented, adding another layer of uncertainty.
In conclusion, while the theoretical gross yields based on FMR and market rent are nearly identical, the practical implications of the low renter density suggest that the market rent yield of 12.68% is more likely to be achieved. Landlords and small-portfolio investors should consider these factors carefully when evaluating the potential returns from Section 8 properties in ZIP 63781.
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.