Location: Rice County, KS | Metro: Ellsworth County, KS
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,010 |
| 1 Bedroom | $1,080 |
| 2 Bedrooms | $1,380 |
| 3 Bedrooms | $1,690 |
| 4 Bedrooms | $1,940 |
| 5 Bedrooms | $2,250 |
| 6 Bedrooms | $2,520 |
| 7 Bedrooms | $2,722 |
| 8 Bedrooms | $2,858 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 67444 provides a detailed look at the financial viability of properties in this area when leased through the federal housing assistance program. Using the annualized Fair Market Rent (FMR) for a 2-bedroom apartment set at $1,100 for FY 2026 and the Census ACS-reported market rent of $1,188, we can derive the gross yield for both scenarios against the median home value of $102,746.
First, let's calculate the gross yield based on the Section 8 FMR. With an annualized rent of $1,100, the total yearly income from a property would be $13,200. Dividing this by the median home value of $102,746 gives us an implied gross yield of approximately 12.85%. This figure represents the potential income generated from the property if it were rented under the Section 8 program.
Next, using the Census ACS-reported market rent of $1,188, the annual income would be $14,256. When this amount is divided by the median home value of $102,746, the implied gross yield comes out to about 13.88%. This calculation reflects the potential income if the property were rented at market rates without the constraints of the Section 8 program.
The gross yield difference between these two scenarios is significant. The market rent scenario offers a higher gross yield compared to the Section 8 FMR scenario. However, the choice between the two should consider other factors such as the stability of rental income and the management requirements associated with the Section 8 program.
Given the 23.3% renter density in ZIP 67444, it is important to note that while the market rent scenario presents a more favorable gross yield, the availability of tenants willing to pay market rates might be limited. The N/A-day Days on Market (DOM) suggests there isn't enough data to determine how quickly properties are typically rented in this area, which could indicate either a stable market or a lack of recent sales activity.
In conclusion, the gross yields suggest that renting at market rates offers a slightly better return on investment. However, the decision should also factor in the local rental market dynamics and the proportion of renters who might prefer or qualify for the Section 8 program. The 12.85% gross yield from Section 8 FMRs versus the 13.88% from market rents provides a concrete basis for comparing these options, though the final choice depends on individual investor preferences and the specific conditions of the local real estate market.
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.