Location: Little River County, AR | Metro: Little River County, AR HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $690 |
| 1 Bedroom | $690 |
| 2 Bedrooms | $910 |
| 3 Bedrooms | $1,260 |
| 4 Bedrooms | $1,370 |
| 5 Bedrooms | $1,589 |
| 6 Bedrooms | $1,780 |
| 7 Bedrooms | $1,922 |
| 8 Bedrooms | $2,018 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 71866 provides insights into potential rental income scenarios for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a two-bedroom apartment in this area, as set by HUD for FY 2024, is $880 per month. Meanwhile, the market rent for a similar unit, based on Census ACS data, stands at $759 per month.
To annualize these figures, we multiply by 12. This gives us an annualized FMR of $10,560 and an annualized market rent of $9,108. Given that the median home value for ZIP 71866 is not available, we can still infer some useful information about gross yields.
The implied gross yield when using the FMR is calculated by dividing the annual rent by the property value. However, without the median home value, we cannot provide a precise percentage. Nonetheless, it's important to note that the FMR is designed to reflect a reasonable rental price that ensures affordability for low-income households. Therefore, it serves as a benchmark for maximum allowable rents under the Section 8 program.
In contrast, the market rent represents what tenants might be willing to pay outside of government assistance programs. Here, the gross yield would also depend on the property value, which is currently unavailable. But it's worth mentioning that the market rent is typically lower than the FMR, indicating that properties rented at market rates might have a lower gross yield compared to those rented through the Section 8 program.
Given the 34.0% renter density in ZIP 71866, landlords should consider the likelihood of finding tenants who qualify for the Section 8 program. The lack of data on days on market (DOM) makes it difficult to assess how quickly units might be filled under either scenario. However, the higher rent under the FMR suggests a potentially more stable income stream, albeit with the administrative overhead associated with the Section 8 program.
In conclusion, while the exact cap rates cannot be determined due to missing property value data, the gross yield from renting at the FMR of $880 per month is likely higher than renting at the market rate of $759 per month. Landlords should weigh the benefits of higher rental income against the complexities of participating in the Section 8 program.
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.