Location: Phelps County, NE | Metro: Phelps County, NE
| Unit Size | Monthly FMR |
|---|---|
| Studio | $730 |
| 1 Bedroom | $780 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,380 |
| 4 Bedrooms | $1,680 |
| 5 Bedrooms | $1,949 |
| 6 Bedrooms | $2,183 |
| 7 Bedrooms | $2,358 |
| 8 Bedrooms | $2,476 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 68958 reveals some interesting insights for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a 2-bedroom apartment in this area, as set by HUD for FY 2026, is $960 per month. This translates to an annual rental income of $11,520 for a 2BR property under the Section 8 program. In contrast, the market rent for a 2BR apartment in ZIP 68958, based on Census ACS data, is $821 per month, leading to an annual rental income of $9,852.
To calculate the gross yield, we use the median home value of $237,705. For the Section 8 scenario, the gross yield is approximately 4.85%, calculated as $11,520 divided by $237,705. For the market rent scenario, the gross yield drops to about 4.15%, calculated as $9,852 divided by $237,705. This indicates that properties leased through the Section 8 program can potentially offer a higher gross yield compared to those rented at market rates.
However, the choice between these two scenarios should be informed by the local rental market conditions. With a renter density of 26.1%, it suggests that a significant portion of the population in ZIP 68958 is likely to be interested in affordable housing options, making the Section 8 program a viable option. Additionally, the fact that the Days on Market (DOM) is listed as N/A could imply that rentals move quickly, indicating strong demand for both market-rate and subsidized units. Given these factors, the Section 8 scenario appears more realistic and potentially more stable for long-term investment, despite the lower market rent gross yield.
In summary, while the Section 8 program offers a gross yield of 4.85% compared to the market rent's 4.15%, the high demand for rental properties and the stability of government-backed leases make the former a more attractive proposition for landlords and small-portfolio investors in ZIP 68958.
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.