Location: Callaway County, MO | Metro: Callaway County, MO HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $790 |
| 1 Bedroom | $800 |
| 2 Bedrooms | $1,040 |
| 3 Bedrooms | $1,250 |
| 4 Bedrooms | $1,470 |
| 5 Bedrooms | $1,705 |
| 6 Bedrooms | $1,910 |
| 7 Bedrooms | $2,063 |
| 8 Bedrooms | $2,166 |
U.S. Census Bureau data (2024)
When considering whether to invest in ZIP 65262 for Section 8 properties, follow this decision tree:
1) Does the Fair Market Rent (FMR) of $850 cover the debt service on a property priced at $354,205?
If you can secure a mortgage rate that allows the FMR to comfortably exceed your monthly debt service, then the answer is yes. For instance, if your debt service is less than $850 per month, you can proceed with confidence. Otherwise, the answer is no.
2) How does the market rent of $1,101 compare to the FMR?
The market rent is significantly higher than the FMR, indicating a strong potential for non-Section 8 tenants willing to pay more. This means that even if the FMR doesn't fully cover your debt service, you could still find tenants willing to pay the higher market rate. Thus, the answer is it depends on your investment strategy and the proportion of Section 8 versus market-rate tenants you're comfortable with.
3) Is there sufficient rental demand in ZIP 65262?
ZIP 65262 has a rental population of 20.2%. However, the Days on Market (DOM) data is not available, which makes it challenging to assess how quickly properties are rented out. Despite this, the high market rent suggests a robust demand for housing in this area. Therefore, the answer is it depends, but leans towards yes, given the high market rent likely attracts a variety of tenants.
To summarize, the decision to buy in ZIP 65262 for Section 8 properties hinges on your ability to manage the gap between FMR and debt service, willingness to cater to both Section 8 and market-rate tenants, and the assumption of a healthy rental market based on the high market rent. If these conditions are met, the investment could be profitable.
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.