Location: Pettis County, MO | Metro: Benton County, MO
| Unit Size | Monthly FMR |
|---|---|
| Studio | $750 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,330 |
| 4 Bedrooms | $1,420 |
| 5 Bedrooms | $1,647 |
| 6 Bedrooms | $1,845 |
| 7 Bedrooms | $1,993 |
| 8 Bedrooms | $2,093 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 65345 provides a detailed look at potential rental income scenarios. Using the annualized Fair Market Rent (FMR) for a 2-bedroom apartment set at $960 for FY 2026, the implied gross yield can be calculated. Given the median home value of $364,990, the annual rent revenue would be $11,520 ($960 x 12 months). This results in a gross yield of approximately 3.16% when divided by the median home value.
In contrast, using the market rent figure of $829 per month from the Census ACS, the annual rent revenue drops to $9,948. This translates into a lower gross yield of about 2.72%. The disparity between these two yields highlights the importance of understanding the specific rental environment in ZIP 65345.
The 24.7% renter density suggests that while a significant portion of the population rents, the majority still owns their homes. This ownership trend could indicate a preference for homeownership over renting, potentially making the market rent scenario more realistic. However, the Fair Market Rent is a government-set benchmark intended to reflect the minimum amount necessary to cover reasonable housing costs, including utilities, in the area. Landlords participating in the Section 8 program might benefit from the higher FMR rates, especially if they cater to tenants who qualify for such assistance.
The N/A-day Days on Market (DOM) indicates that there is insufficient data to determine how quickly properties are rented out in this ZIP code. This lack of information could affect the decision-making process for investors, as it does not provide insight into the rental market's liquidity. Despite this, the gross yield comparisons offer a clear snapshot of potential returns under different rental conditions.
In conclusion, while the Section 8 FMR scenario presents a higher gross yield of 3.16%, the market rent scenario offers a more conservative yield of 2.72%. Given the context of the local rental market, the latter may be more reflective of actual rental incomes. Nonetheless, participation in the Section 8 program could stabilize cash flows and reduce vacancy rates, making it an attractive option for landlords willing to navigate the associated administrative processes.
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.