Location: Randolph County, MO | Metro: Monroe County, MO
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 | $710 |
| 1 Bedroom | $770 |
| 2 Bedrooms | $960 |
| 3 Bedrooms | $1,150 |
| 4 Bedrooms | $1,450 |
| 5 Bedrooms | $1,682 |
| 6 Bedrooms | $1,884 |
| 7 Bedrooms | $2,035 |
| 8 Bedrooms | $2,137 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $960 | $145,517 | 0.66% | D |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $890 for ZIP 65263 (Madison, MO) can sufficiently cover the mortgage on a median-priced home valued at $236,907. To assess this, we must consider the typical interest rates and loan terms. Assuming a 30-year fixed-rate mortgage at an average rate of 5%, the monthly payment on a $236,907 home would be approximately $1,250, including principal and interest but excluding property taxes and insurance. This figure exceeds the FMR by $360 per month, indicating that relying solely on FMR would not cover the mortgage costs.
The second objection concerns the level of rental demand in Madison, MO. With only 19.0% of households renting, it may seem that there isn't sufficient demand to support a significant number of rental properties. However, the percentage alone does not provide a complete picture. The total number of households in ZIP 65263 is 1,600, meaning approximately 304 households are renters. While this might appear low, it's important to consider the local job market and economic conditions which could influence the actual demand for rental properties. Without detailed employment and migration data, it's challenging to definitively state the adequacy of demand, but the presence of any rental households suggests some level of interest in renting.
The final concern is whether voucher amounts will keep pace with the market rents. The average voucher amount in the area is $683, which is below the market rent of $890. This gap means that landlords who accept vouchers might need to subsidize the difference or find non-voucher tenants willing to pay the higher market rate. It's worth noting that the government periodically adjusts voucher amounts to reflect changes in the cost of living and housing prices. However, the current data indicates a shortfall that could impact profitability for landlords.
In summary, while ZIP 65263 presents challenges such as a lower-than-average rental demand and a discrepancy between voucher amounts and market rents, these factors must be weighed against other local conditions and personal investment goals. For those considering investing in this area, understanding the local dynamics beyond just numbers is crucial.
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.