Location: Kansas City, MO | Metro: Kansas City, MO-KS HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,260 |
| 1 Bedroom | $1,370 |
| 2 Bedrooms | $1,550 |
| 3 Bedrooms | $2,030 |
| 4 Bedrooms | $2,430 |
| 5 Bedrooms | $2,819 |
| 6 Bedrooms | $3,157 |
| 7 Bedrooms | $3,410 |
| 8 Bedrooms | $3,581 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate picture for ZIP code 66031 is based on the Fair Market Rent (FMR) for a two-bedroom apartment, which is set at $1200 annually for fiscal year 2024. This figure is critical for understanding potential rental income under the Section 8 program.
However, without specific data on the median home value and the current market rent for the area, it's challenging to provide a precise comparison. The absence of these figures means we cannot calculate an exact gross yield for the market rent scenario. Nonetheless, we can infer that the gross yield under the Section 8 program would be lower than what could potentially be achieved through market rents, assuming market rents exceed the FMR.
The implied gross yield for a property rented through the Section 8 program at $1200 per month would be directly tied to the purchase price or value of the property. For example, if the median home value were hypothetically $200,000, the annualized FMR would represent a gross yield of 7.2%. This calculation is based on the formula: ($1200 * 12) / $200,000 = 7.2%. However, since the median home value is not provided, this remains speculative.
The lack of market rent data also prevents us from making a direct comparison. Typically, market rents in an area would need to be known to assess how much higher the gross yield might be compared to the Section 8 FMR. In ZIP 66031, the renter density and days on market (DOM) are also not specified, which are important factors in determining the likelihood of achieving higher yields through market rents versus Section 8 rents.
In conclusion, while the Section 8 program offers a stable source of income at a fixed rate, the gross yield is contingent upon the property's value. Without additional data on median home values and market rents, it's impossible to definitively state which scenario is more financially advantageous. Investors should consider the stability of Section 8 rents versus the potential volatility of market rents when making their investment decisions.
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.