Location: Topeka, KS | Metro: Topeka, KS MSA
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 | $900 |
| 1 Bedroom | $950 |
| 2 Bedrooms | $1,220 |
| 3 Bedrooms | $1,630 |
| 4 Bedrooms | $1,650 |
| 5 Bedrooms | $1,914 |
| 6 Bedrooms | $2,144 |
| 7 Bedrooms | $2,316 |
| 8 Bedrooms | $2,432 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $950 | $58,292 | 1.63% | A+ |
| 2BR | $1,220 | $94,611 | 1.29% | A |
| 3BR | $1,630 | $122,215 | 1.33% | A |
| 4BR | $1,650 | $134,774 | 1.22% | A |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 66616 in Topeka, KS, reveals some interesting insights into the potential returns for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a 2-bedroom apartment in FY 2024 is set at $910 annually, while the market rent based on Census ACS data is $1,078 per month.
To calculate the implied gross yield, we first annualize the market rent to $12,936 ($1,078 x 12 months). Given the median home value of $97,162, the gross yield for a property rented at market rates would be approximately 13.32%. This is calculated by dividing the annualized market rent by the median home value: $12,936 / $97,162 = 0.1332, or 13.32%.
On the other hand, if a landlord relies solely on Section 8 vouchers, the annual rent received would be $910. The gross yield in this scenario is significantly lower at about 0.94%, calculated by $910 / $97,162 = 0.0094, or 0.94%. This stark difference highlights the financial impact of choosing between market rents and Section 8 rental assistance.
Given the 30.7% renter density in ZIP 66616, it's important to note that the majority of homeowners in this area do not rely on rental income. However, for those who do, the choice between market rents and Section 8 assistance can greatly affect their investment's profitability. The N/A-day Days on Market (DOM) suggests that either there is insufficient data to provide an accurate DOM figure, or the market is highly efficient with quick turnover.
In reality, landlords should consider the stability and security that Section 8 provides versus the higher yield from market rents. While the gross yield from market rents is substantially higher at 13.32%, the guaranteed payments and tenant support from Section 8 might offset the lower 0.94% gross yield for many investors. The decision should also factor in the local housing dynamics and the landlord's risk tolerance.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.