Location: Wayne County, NE | Metro: Madison County, NE
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 | $780 |
| 1 Bedroom | $880 |
| 2 Bedrooms | $1,110 |
| 3 Bedrooms | $1,430 |
| 4 Bedrooms | $1,690 |
| 5 Bedrooms | $1,960 |
| 6 Bedrooms | $2,195 |
| 7 Bedrooms | $2,371 |
| 8 Bedrooms | $2,490 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $880 | $123,935 | 0.71% | D |
| 2BR | $1,110 | $202,029 | 0.55% | F |
| 3BR | $1,430 | $265,570 | 0.54% | F |
| 4BR | $1,690 | $332,879 | 0.51% | F |
| 5BR | $1,960 | $430,486 | 0.46% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP 68701 in Norfolk, Nebraska, reveals key insights into investment potential. For a two-bedroom unit, the Fair Market Rent (FMR) for fiscal year 2026 is set at $1,020 annually, while the Zillow Observed Rental Index (ZORI) indicates a market rent of $1,234 per month.
To calculate the gross yield for each scenario, we annualize the monthly rents and divide by the median home value of $256,052. The Section 8 FMR annual rent is $12,240 ($1,020 x 12 months), resulting in a gross yield of approximately 4.78%. This is calculated by dividing the annual rent by the median home value: $12,240 / $256,052 = 0.0478 or 4.78%. In contrast, the market rent annualized is $14,808 ($1,234 x 12 months), leading to a gross yield of about 5.78%. Calculated as $14,808 / $256,052 = 0.0578 or 5.78%.
Given the 35.5% renter density and an average Days on Market (DOM) of 43 days, the market rent scenario appears more realistic. The higher renter density suggests a robust demand for rental properties, and the relatively low DOM indicates that properties are quickly occupied once listed. This combination supports the likelihood of achieving the higher market rent rather than the lower FMR offered through Section 8.
However, it's important to note that Section 8 provides stable, government-backed income, which can be attractive despite the lower gross yield. The choice between market rent and Section 8 participation should consider the stability versus the higher yield potential. For those prioritizing consistent cash flow and less reliance on market fluctuations, Section 8 at a 4.78% gross yield might be preferable. Conversely, for investors seeking to maximize returns and willing to navigate the dynamics of the local rental market, the market rent scenario offers a 5.78% gross yield.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.