Location: Gosper County, NE | Metro: Custer County, NE
| Unit Size | Monthly FMR |
|---|---|
| Studio | $800 |
| 1 Bedroom | $910 |
| 2 Bedrooms | $1,110 |
| 3 Bedrooms | $1,400 |
| 4 Bedrooms | $1,460 |
| 5 Bedrooms | $1,694 |
| 6 Bedrooms | $1,897 |
| 7 Bedrooms | $2,049 |
| 8 Bedrooms | $2,151 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 68850 in Lexington, NE, reveals two distinct scenarios based on the Fair Market Rent (FMR) and market rent figures. Using the annualized 2BR FMR of $1,040 for FY 2026, the implied gross yield for a property in this area would be approximately 6.05%. This calculation is derived from dividing the annual rent ($1,040 * 12 months = $12,480) by the median home value of $204,959.
In contrast, using the Zillow Observed Rent Index (ZORI) of $1,280 for a 2BR unit, the implied gross yield increases significantly to about 7.57%. This figure comes from multiplying the monthly market rent ($1,280) by 12 months to get an annual rent of $15,360, and then dividing that by the median home value of $204,959.
Given the 40.5% renter density in Lexington, NE, it's important to note that while the ZORI-based gross yield is higher, the reality of Section 8 participation might lean towards the FMR-based scenario. The FMR represents the government-set limit for rental assistance, and landlords who participate in the Section 8 program must adhere to these limits. Therefore, the 6.05% gross yield is more reflective of the actual income potential for Section 8 properties in this ZIP code.
The N/A-day Days on Market (DOM) indicates that there isn't sufficient data to determine how quickly properties are rented out, which could suggest either a stable market where homes are consistently occupied or a lack of recent transactional data. In either case, the lower gross yield based on FMR is more likely to be the prevailing scenario for Section 8 properties in ZIP 68850.
To summarize, the gross yield for a Section 8 property in ZIP 68850 is approximately 6.05%, whereas the market rent scenario suggests a higher yield of about 7.57%. However, due to the constraints of the Section 8 program, the lower gross yield is more realistic for investors considering this ZIP code.
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.