Location: Kansas City, MO | Metro: Kansas City, MO-KS HUD Metro FMR Area
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 | $810 |
| 1 Bedroom | $880 |
| 2 Bedrooms | $1,000 |
| 3 Bedrooms | $1,310 |
| 4 Bedrooms | $1,560 |
| 5 Bedrooms | $1,810 |
| 6 Bedrooms | $2,027 |
| 7 Bedrooms | $2,189 |
| 8 Bedrooms | $2,298 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,000 | $156,884 | 0.64% | D |
| 3BR | $1,310 | $247,513 | 0.53% | F |
| 4BR | $1,560 | $334,595 | 0.47% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 64085, Richmond, MO, reveals some interesting insights into potential investment opportunities. Based on the Fair Market Rent (FMR) for a two-bedroom apartment set at $1050 annually and the Census-reported market rent of $733 annually, we can calculate the implied gross yields against the median home value of $234,228.
First, using the annualized FMR of $1050, the implied gross yield for a Section 8 property would be approximately 0.45%. This is derived by taking the annual rental income ($1050) and dividing it by the median home value ($234,228).
Second, if we use the market rent figure of $733 annually, the implied gross yield drops significantly to about 0.31%. This calculation is made similarly by dividing the annual market rent ($733) by the median home value ($234,228).
Given that the renter density in Richmond, MO, stands at 36.9%, it suggests that a significant portion of the population is already renting, which could influence the demand for Section 8 properties. However, the lack of data on days on market (DOM) makes it difficult to gauge the liquidity and turnover rates of properties in this area.
The higher gross yield based on the FMR is more realistic for investors looking to secure Section 8 tenants. While the market rent offers a lower gross yield, it reflects the actual rental prices paid by non-subsidized tenants, indicating that the FMR rate might be an upper limit rather than a typical market rate. Investors should consider the stability and security of Section 8 tenancy against the potentially higher gross yield, balancing these factors with local rental dynamics and the percentage of renters in the community.
In conclusion, the gross yield comparison clearly shows that Section 8 properties offer a more favorable return when compared to the current market rents, making them a viable option for landlords and small-portfolio investors seeking steady income streams. However, the decision should also take into account the specifics of the local rental market and the overall economic environment.
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.