Location: Saunders County, NE | Metro: Saunders County, NE HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $970 |
| 1 Bedroom | $1,050 |
| 2 Bedrooms | $1,200 |
| 3 Bedrooms | $1,610 |
| 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 68040 reveals some key insights for landlords and small-portfolio investors. Based on the Fair Market Rent (FMR) for a two-bedroom apartment set at $990 per month for fiscal year 2024, we can annualize this figure to $11,880. This rental income must be compared against the median home value in the area, which stands at $459,619.
To calculate the implied gross yield using the FMR, divide the annualized rent by the median home value. The calculation is as follows:
$11,880 / $459,619 = 0.0258 or 2.58%
This represents the gross yield if a landlord were to rely solely on the Section 8 program for rental income. However, this scenario is not entirely realistic due to the low renter density of 0.6%. This suggests that there is limited demand for Section 8 housing in the area, which could affect occupancy rates and thus the stability of income.
In the absence of market rent data, it's difficult to provide an exact comparison. However, it's important to note that market rents typically exceed the FMR set by the government. If market rents were higher, say at $1,200 per month, the annualized rent would be $14,400. This would result in a gross yield of:
$14,400 / $459,619 = 0.0313 or 3.13%
The implied gross yield of 3.13% is significantly higher than the 2.58% derived from the FMR. Given the low renter density, it's more likely that landlords would struggle to achieve the higher market rent consistently. Therefore, while the potential for a higher gross yield exists, the reality of operating in ZIP 68040 might mean that the lower FMR-based yield is closer to what landlords can expect.
The lack of data regarding the Days on Market (DOM) further complicates the analysis. With no specific DOM information, it's challenging to predict how quickly a property could be rented out under either scenario. However, the low renter density indicates that finding tenants who qualify for Section 8 might take longer, affecting the overall cash flow and profitability of the investment.
In conclusion, while the theoretical gross yield based on market rents is higher, the practical considerations of low renter density and potentially longer vacancy periods suggest that the FMR-based gross yield of 2.58% is a more realistic expectation for landlords and small- portfolio investors in ZIP 68040.
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.