Location: Thomas County, KS | Metro: Logan County, KS
| Unit Size | Monthly FMR |
|---|---|
| Studio | $780 |
| 1 Bedroom | $850 |
| 2 Bedrooms | $1,060 |
| 3 Bedrooms | $1,270 |
| 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 Section 8 cap rate analysis for ZIP code 67732 reveals a nuanced investment landscape that landlords and small-portfolio investors should consider. Based on the Fair Market Rent (FMR) for a two-bedroom apartment set at $980 annually for Fiscal Year 2026, and the median home value of $158,948, we can derive some key insights.
If a landlord were to rely solely on the Section 8 voucher program, the annualized rental income would be $980 per unit. This translates into an implied gross yield of approximately 0.62%. The calculation is straightforward: $980 divided by $158,948 equals 0.62%. However, this figure does not account for expenses such as property taxes, insurance, maintenance, and other operational costs, which would reduce the actual net operating income (NOI).
In contrast, if the landlord were to charge the market rent of $746 annually, the implied gross yield would be approximately 0.47%. This is calculated by dividing $746 by the median home value of $158,948. Again, this is a simplified gross yield that does not factor in the aforementioned expenses.
Given the 24.5% renter density in ZIP 67732, it's important to note that while there is a significant portion of renters, it is not overwhelming. This suggests that the market rent scenario might be more realistic for most units, as the demand for Section 8 housing could be limited by the relatively low proportion of renters who qualify for and use vouchers.
The average days on market (DOM) being N/A indicates either insufficient data or a highly competitive rental market where properties are leased quickly, often without needing to list them publicly. If the market is indeed fast-moving, landlords might find it challenging to secure long-term Section 8 tenants, as the process can be lengthy and complex compared to market-rate rentals.
Investors should weigh these factors carefully. While the Section 8 voucher program provides a guaranteed source of income, the lower gross yield when compared to market rates suggests that landlords may need to evaluate the trade-offs between the security of a government-backed tenant and the potential for higher returns through market-rate rentals.
In summary, the Section 8 cap rate for ZIP 67732 offers a gross yield of 0.62%, whereas the market rate yields 0.47%. Given the context of the local rental market and the percentage of renters, the market rate scenario presents a more practical outlook for most investors.
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.