Location: Wichita, KS | Metro: Wichita, KS HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $860 |
| 1 Bedroom | $910 |
| 2 Bedrooms | $1,170 |
| 3 Bedrooms | $1,540 |
| 4 Bedrooms | $1,900 |
| 5 Bedrooms | $2,204 |
| 6 Bedrooms | $2,468 |
| 7 Bedrooms | $2,665 |
| 8 Bedrooms | $2,798 |
U.S. Census Bureau data (2024)
The Section 8 cap rate scenario for ZIP 67133, Rose Hill, Kansas, reveals a distinct gap between the federally determined Fair Market Rent (FMR) and the local market rental rates. For a two-bedroom unit, the FMR for FY 2024 is set at $1300 annually, while the Zillow Observed Rent Index (ZORI) indicates a market rent of $1,575 per month.
To calculate the gross yield, we first annualize the monthly rents. The annualized FMR for a two-bedroom unit is $15,600 ($1300 x 12 months), and the annualized market rent is $18,900 ($1,575 x 12 months).
The median home value in ZIP 67133 is $269,522. Using this figure, the implied gross yield based on the FMR is approximately 5.8%. This is derived by dividing the annualized FMR of $15,600 by the median home value of $269,522. On the other hand, the implied gross yield based on the market rent is around 7.0%, calculated by dividing the annualized market rent of $18,900 by the same median home value.
Given the 12.8% renter density in the area, it is clear that the market rent scenario is more reflective of the actual rental environment. The N/A-day Days on Market (DOM) suggests that properties in this area are either rented quickly or not listed publicly, indicating strong demand among renters. Therefore, landlords and small-portfolio investors should anticipate a higher gross yield closer to the 7.0% mark rather than the 5.8% offered by the FMR.
In conclusion, while the FMR provides a baseline for Section 8 rental rates, the reality of the local rental market points towards a higher gross yield. Investors should consider the stronger market conditions when evaluating potential returns on investment in ZIP 67133.
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.