Location: Wichita, KS | Metro: Wichita, KS HUD Metro FMR Area
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 | $740 |
| 1 Bedroom | $780 |
| 2 Bedrooms | $990 |
| 3 Bedrooms | $1,310 |
| 4 Bedrooms | $1,620 |
| 5 Bedrooms | $1,879 |
| 6 Bedrooms | $2,104 |
| 7 Bedrooms | $2,272 |
| 8 Bedrooms | $2,386 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $780 | $90,678 | 0.86% | C |
| 2BR | $990 | $135,720 | 0.73% | D |
| 3BR | $1,310 | $170,433 | 0.77% | D |
| 4BR | $1,620 | $238,349 | 0.68% | D |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 67218 in Wichita, KS, reveals some interesting dynamics for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a 2-bedroom apartment in fiscal year 2024 is set at $940 annually, while the Zillow Observed Rent Index (ZORI) indicates a market rent of $1,077 per month for the same unit type.
To derive the gross yield, we first annualize the monthly rents. For the Section 8 scenario, the annualized rent would be $940 multiplied by 12, which equals $11,280. In contrast, the market rent annualized would be $1,077 multiplied by 12, totaling $12,924.
The median home value in ZIP 67218 is $150,683. Using this figure, we can calculate the implied gross yields for both the Section 8 and market rent scenarios. For the Section 8 scenario, the gross yield is calculated by dividing the annualized rent ($11,280) by the median home value ($150,683), resulting in an implied gross yield of approximately 7.5%. Conversely, the market rent scenario produces a gross yield of about 8.6%, calculated by dividing $12,924 by $150,683.
Given that 50.3% of the residents in ZIP 67218 are renters and the average days on market (DOM) is 23 days, it's evident that there is a strong rental demand in the area. However, the reality of the situation is that Section 8 properties typically command lower rents due to the strict guidelines and subsidies involved. Therefore, while the market rent scenario offers a higher gross yield, the Section 8 scenario is more realistic for the area, considering the high percentage of renters and the swift turnover rates indicated by the DOM.
In conclusion, the gross yield for Section 8 properties in ZIP 67218 is approximately 7.5%, whereas the market rent offers a slightly better gross yield of around 8.6%. Despite the higher yield from market rent, the Section 8 scenario reflects a more practical outlook for investors looking to capitalize on the robust rental market in this region.
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.