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 | $1,710 |
| 1 Bedroom | $1,860 |
| 2 Bedrooms | $2,110 |
| 3 Bedrooms | $2,760 |
| 4 Bedrooms | $3,300 |
| 5 Bedrooms | $3,828 |
| 6 Bedrooms | $4,287 |
| 7 Bedrooms | $4,630 |
| 8 Bedrooms | $4,862 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,860 | $222,978 | 0.83% | C |
| 2BR | $2,110 | $322,219 | 0.65% | D |
| 3BR | $2,760 | $401,223 | 0.69% | D |
| 4BR | $3,300 | $452,910 | 0.73% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 64108 in Kansas City, MO, reveals key insights into potential investment opportunities. The Fair Market Rent (FMR) for a 2-bedroom apartment in fiscal year 2024 is set at $1740 annually, while the market rent, as indicated by ZORI (Zillow Observed Rent Index), stands at $1,560 per month.
To calculate the gross yield for both scenarios, we first annualize the market rent: $1,560 * 12 = $18,720. Comparing this to the median home value of $295,722, the implied gross yield is approximately 6.33%. For the Section 8 scenario, using the FMR of $1740 per month, the annualized rent is $1740 * 12 = $20,880. This results in an implied gross yield of about 7.06% when compared to the median home value.
The higher gross yield under the Section 8 scenario suggests that it could be more profitable for landlords and small-portfolio investors. However, the reality of investment in this area must also consider other factors such as the high renter density of 67.7%, indicating a strong rental market, and the N/A-day DOM (Days on Market), which implies that homes are either sold quickly or there's limited data available on typical selling times.
Given the renter density, it's likely that the market rent scenario will have a steady demand, but the Section 8 scenario offers a slightly better gross yield. The lack of specific DOM data makes it difficult to assess how long properties might remain vacant between tenants. Nevertheless, the 7.06% gross yield from Section 8 rentals is a compelling figure, especially if you factor in the stability of government-backed rent payments.
In conclusion, while both scenarios present viable investment options, the Section 8 scenario provides a marginally higher gross yield. Landlords and investors should weigh this against the potential risks and benefits, including tenant turnover rates and the overall health of the local rental market.
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.