Location: White County, AR | Metro: Prairie County, AR
| Unit Size | Monthly FMR |
|---|---|
| Studio | $650 |
| 1 Bedroom | $740 |
| 2 Bedrooms | $910 |
| 3 Bedrooms | $1,190 |
| 4 Bedrooms | $1,210 |
| 5 Bedrooms | $1,404 |
| 6 Bedrooms | $1,572 |
| 7 Bedrooms | $1,698 |
| 8 Bedrooms | $1,783 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 72060 reveals a distinct disparity between the federally mandated Fair Market Rent (FMR) and the prevailing market rents. For a two-bedroom property, the FMR set by HUD for fiscal year 2026 is $880 annually, while the Census ACS reports the average market rent at $1,270 per month.
To derive the gross yield, we first need to annualize these figures. The annualized FMR for a two-bedroom unit comes to $880, whereas the annualized market rent would be $15,240 ($1,270 x 12 months).
The median home value in ZIP 72060 is not available, making it challenging to calculate an exact cap rate. However, we can still compare the gross yields based on the rental income. Using the FMR of $880, the implied gross yield is significantly lower compared to using the market rent of $15,240. This comparison starkly highlights the financial implications for landlords participating in the Section 8 program versus those leasing properties at market rates.
Given the 13.3% renter density in the area, it is important to note that the demand for rental properties is relatively low. This could affect the likelihood of securing tenants willing to pay market rates, thereby making the lower FMR scenario more plausible. Additionally, the lack of data on days on market (DOM) suggests that there might be inefficiencies or inconsistencies in the local real estate market, further supporting the notion that market rents may not always be achievable.
In conclusion, while the market rent of $1,270 per month offers a much higher gross yield of approximately 10.2%, the Section 8 FMR of $880 annually implies a gross yield that is substantially lower. Considering the low renter density and the unavailability of DOM data, landlords should prepare for the possibility that achieving market rents may be difficult, and the FMR scenario is likely to be more reflective of actual rental income in ZIP 72060.
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.