Location: Otoe County, NE | Metro: Omaha-Council Bluffs, NE-IA 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 | $1,130 |
| 1 Bedroom | $1,190 |
| 2 Bedrooms | $1,560 |
| 3 Bedrooms | $2,050 |
| 4 Bedrooms | $2,120 |
| 5 Bedrooms | $2,459 |
| 6 Bedrooms | $2,754 |
| 7 Bedrooms | $2,974 |
| 8 Bedrooms | $3,123 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,560 | $243,097 | 0.64% | D |
| 3BR | $2,050 | $337,594 | 0.61% | D |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $1,030 for ZIP 68418 in fiscal year 2024 can sufficiently cover the mortgage on a home priced at $334,489. This concern is valid given that mortgage payments depend on various factors including interest rates and loan terms. However, using an average fixed-rate mortgage of 4.5% over 30 years, the monthly payment on a $334,489 home would be approximately $1,650, which is higher than the FMR. To ensure profitability, landlords must consider additional income streams or cost-saving measures.
The investor may also doubt if there is sufficient rental demand in Palmyra, NE, considering the rental vacancy rate stands at 9.2%. This rate is relatively high, indicating a moderate level of competition among landlords. Yet, it's important to note that the vacancy rate alone does not determine the success of a rental property. Other factors such as the local economy, job availability, and population growth play significant roles. For instance, if the area experiences economic growth, demand for rentals could increase. It's crucial to monitor these broader trends to make informed decisions.
Another objection could be whether Housing Choice Vouchers will keep up with the market rent of $1,306. The voucher program aims to cover a substantial portion of the rent but may not always match the exact amount due to budget constraints and policy changes. In ZIP 68418, voucher holders typically receive assistance that covers around 70% of the market rent, which would be approximately $914. This leaves a gap for landlords, who must decide if they are willing to accept lower rents or require additional contributions from tenants. While the voucher program helps secure tenants, landlords need to balance their income expectations with the realities of government assistance levels.
In summary, while the data provides insights into FMR, rental demand, and voucher coverage, it's essential to recognize that individual circumstances and broader economic conditions can influence the success of rental investments in ZIP 68418. Careful financial planning and an understanding of local market dynamics are critical for achieving sustainable returns.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.