Location: Linn County, MO | Metro: Linn County, MO
| Unit Size | Monthly FMR |
|---|---|
| Studio | $710 |
| 1 Bedroom | $740 |
| 2 Bedrooms | $960 |
| 3 Bedrooms | $1,150 |
| 4 Bedrooms | $1,260 |
| 5 Bedrooms | $1,462 |
| 6 Bedrooms | $1,637 |
| 7 Bedrooms | $1,768 |
| 8 Bedrooms | $1,856 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 64674 provides valuable insights into the potential rental income and property values for landlords and small-portfolio investors. The Federal Market Rent (FMR) for a two-bedroom apartment in ZIP 64674 for fiscal year 2026 is set at an annualized rate of $890. Meanwhile, the market rent for a similar unit, according to the Census American Community Survey, stands at $285 per month, translating to an annualized rate of $3,420.
To calculate the implied gross yield for both scenarios, we first consider the FMR rate. With an annual rent of $890 and a median home value of $187,309, the implied gross yield for the Section 8 scenario is approximately 0.47%. This is calculated by dividing the annual rent ($890) by the median home value ($187,309).
In contrast, the implied gross yield for the market rent scenario, using an annual rent of $3,420 against the same median home value, is significantly higher at about 1.83%. This calculation is derived by dividing the annual market rent ($3,420) by the median home value ($187,309).
Given the low renter density of 12.3%, it's important to note that the likelihood of finding tenants willing to pay the market rent is relatively low. This makes the Section 8 scenario more realistic for this ZIP code. The N/A-day Days on Market (DOM) indicates there might be a lack of recent data or activity in the rental market, which could mean that the rental turnover is slower than average, further supporting the reliance on Section 8 as a stable source of income.
While the gross yield under the Section 8 scenario is lower at 0.47% compared to the market rent scenario's 1.83%, the stability provided by government-backed rental assistance can outweigh the lower yield for many investors. Landlords should consider the trade-off between a higher gross yield and the security of a steady tenant base when deciding whether to participate in the Section 8 program.
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.