Location: Ness County, KS | Metro: Ness County, KS
| Unit Size | Monthly FMR |
|---|---|
| Studio | $840 |
| 1 Bedroom | $870 |
| 2 Bedrooms | $1,140 |
| 3 Bedrooms | $1,480 |
| 4 Bedrooms | $1,560 |
| 5 Bedrooms | $1,810 |
| 6 Bedrooms | $2,027 |
| 7 Bedrooms | $2,189 |
| 8 Bedrooms | $2,298 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 67516 reveals a stark contrast between the federal market rent (FMR) and the actual market rent. For a two-bedroom apartment, the FMR for fiscal year 2026 is set at $970, while the Census ACS reports the market rent at $529.
To derive the gross yield for these scenarios, we can use the median home value of $79,599 as a reference point. The implied gross yield based on the FMR would be approximately 12.2%, calculated as follows: ($970 * 12 months) / $79,599 = 12.2%. In contrast, the gross yield based on the market rent is significantly lower, around 7.8%, computed as: ($529 * 12 months) / $79,599 = 7.8%.
The disparity between these two yields highlights the potential benefits of participating in the Section 8 program. However, the decision to enter the program should also consider the rental market dynamics and tenant preferences. With a renter density of 22.5%, it's clear that a significant portion of the housing market in ZIP 67516 is occupied by renters. This statistic supports the viability of rental properties, including those under the Section 8 program.
The absence of data on days on market (DOM) suggests that either this metric is not tracked locally, or there isn't enough fluctuation in rental listings to provide meaningful insights. Despite this limitation, the higher gross yield from the FMR scenario makes it a more attractive option for landlords and small-portfolio investors looking to maximize returns. It's important to note, however, that the actual net operating income (NOI) will depend on factors such as maintenance costs, vacancy rates, and management fees, which investors must calculate independently.
In conclusion, the Section 8 program offers a gross yield of about 12.2% for a two-bedroom unit in ZIP 67516, compared to the market rent yield of 7.8%. Given the 22.5% renter density, the higher yield from the FMR is likely more achievable, though it requires adherence to program guidelines and scrutiny of additional operational expenses.
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.