Location: Henry County, MO | Metro: Bates County, MO 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 | $750 |
| 1 Bedroom | $800 |
| 2 Bedrooms | $1,000 |
| 3 Bedrooms | $1,300 |
| 4 Bedrooms | $1,500 |
| 5 Bedrooms | $1,740 |
| 6 Bedrooms | $1,949 |
| 7 Bedrooms | $2,105 |
| 8 Bedrooms | $2,210 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,300 | $289,162 | 0.45% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 64788 provides a clear picture of potential investment returns based on the Federal Market Rent (FMR) and market rent figures. The annualized Fair Market Rent for a two-bedroom property in this area for FY 2024 is set at $900 per month, while the market rent based on Census ACS data stands at $863 per month. Given the median home value in ZIP 64788 is $278,416, we can calculate the implied gross yields for both scenarios.
Using the FMR of $900 per month, the annual rental income would be $10,800. This translates to an implied gross yield of approximately 3.88%. In contrast, using the market rent figure of $863 per month, the annual rental income would be $10,356, leading to an implied gross yield of about 3.72%.
The difference between these two yields is marginal, but it's important to consider which scenario is more realistic given the local market conditions. ZIP 64788 has a renter density of 25.2%, indicating that a significant portion of the population owns homes rather than renting. This suggests that landlords might find it challenging to command the higher FMR rent consistently, as there could be less demand from renters compared to homeowners.
Additionally, the N/A-day Days on Market (DOM) indicates incomplete or unavailable data regarding how quickly properties are rented out. This lack of information could imply variability in rental demand, further suggesting that landlords should rely on more conservative estimates when projecting rental income.
In conclusion, while the FMR-based gross yield of 3.88% is slightly higher, the market rent-based gross yield of 3.72% appears more realistic considering the local ownership trends and the uncertainty around rental demand. Investors should use these figures as a baseline for their own detailed calculations, factoring in property management costs, vacancy rates, and other expenses to determine the net operating income (NOI).
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.