Location: Douglas County, MO | Metro: Douglas County, MO
| Unit Size | Monthly FMR |
|---|---|
| Studio | $720 |
| 1 Bedroom | $760 |
| 2 Bedrooms | $990 |
| 3 Bedrooms | $1,310 |
| 4 Bedrooms | $1,510 |
| 5 Bedrooms | $1,752 |
| 6 Bedrooms | $1,962 |
| 7 Bedrooms | $2,119 |
| 8 Bedrooms | $2,225 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap rate for ZIP 65768 reveals some interesting insights. First, let's consider the Fair Market Rent (FMR) for a 2-bedroom unit, which is set at $930 annually for FY 2026. Given the median home value in ZIP 65768 is approximately $271,100, we can derive an implied gross yield for the Section 8 scenario.
To calculate the gross yield, we use the formula:
Gross Yield = (Annual Rent / Median Home Value) * 100
Plugging in the numbers, we get:
Gross Yield = ($930 / $271,100) * 100 ≈ 0.34%
This low yield reflects the conservative nature of the FMR, designed to ensure affordability rather than profitability. However, it is important to note that this figure does not account for the potential for higher rents in the private market.
Unfortunately, the specific market rent for a 2-bedroom unit in ZIP 65768 is not available. Given the general trend of rents in the area, we can infer that market rents might be higher than the FMR. This would imply a potentially higher gross yield for landlords who choose not to participate in the Section 8 program.
Considering the 22.9% renter density in ZIP 65768, it is clear that there is a significant portion of the population that relies on rental housing. This could suggest that landlords have the flexibility to adjust rents based on market conditions and tenant preferences. However, the lack of specific market rent data makes it challenging to provide a precise comparison between the Section 8 and market rent scenarios.
In conclusion, while the Section 8 program provides a stable income stream with a guaranteed gross yield of approximately 0.34%, the potential for higher yields exists in the private rental market. Landlords should weigh these factors carefully when deciding whether to participate in the Section 8 program or seek higher returns through market-rate rentals.
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.