Location: McPherson County, NE | Metro: Hooker County, NE
| Unit Size | Monthly FMR |
|---|---|
| Studio | $730 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,250 |
| 4 Bedrooms | $1,390 |
| 5 Bedrooms | $1,612 |
| 6 Bedrooms | $1,805 |
| 7 Bedrooms | $1,949 |
| 8 Bedrooms | $2,046 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 69167 reveals an interesting dynamic between federal market rent (FMR) and actual market rents. The annualized 2BR FMR for fiscal year 2026 stands at $980, while the Census ACS indicates a market rent of $588.
To derive the implied gross yield, we must first understand that the cap rate is calculated by dividing the net operating income (NOI) by the property value. However, since the median home value for ZIP 69167 is not available, we can only provide a comparison based on the gross rental yields, which are derived by dividing the annual rent by the property value.
In the case of the FMR, if we assume a hypothetical property value, the gross rental yield would be higher due to the higher rent figure. For example, if a property were valued at $100,000, the gross rental yield using the FMR would be 1.176%, calculated by multiplying the monthly FMR ($980) by 12 months and then dividing by the property value ($100,000).
Conversely, using the market rent of $588, the gross rental yield would be lower. With the same $100,000 property value, the gross rental yield would be 0.7056%, calculated similarly by multiplying the monthly market rent ($588) by 12 months and then dividing by the property value ($100,000).
Given the 40.8% renter density in ZIP 69167, it's important to consider the stability and demand for rental properties. This percentage suggests a moderate reliance on rentals, which could support higher rents under certain conditions. However, the lack of days-on-market (DOM) data makes it difficult to assess the speed at which units are leased, which is crucial for understanding the liquidity and turnover rates in the rental market.
Based on the available information, the market rent scenario seems more realistic. While the FMR provides a benchmark for what the government considers fair rent, the actual market rent reflects the true economic conditions and tenant preferences. Landlords should focus on the $588 market rent figure when assessing potential investments, as it aligns more closely with the current rental landscape in ZIP 69167.
Investors should also note that the cap rate is just one aspect of investment analysis. Other factors such as property management costs, vacancy rates, and maintenance expenses play a significant role in determining the overall profitability of a rental property. Therefore, while the gross rental yield comparison offers valuable insight, it should be complemented with a thorough understanding of local market dynamics and operational considerations.
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.