Location: Prairie County, AR | Metro: Prairie County, AR
| Unit Size | Monthly FMR |
|---|---|
| Studio | $770 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $970 |
| 3 Bedrooms | $1,270 |
| 4 Bedrooms | $1,470 |
| 5 Bedrooms | $1,705 |
| 6 Bedrooms | $1,910 |
| 7 Bedrooms | $2,063 |
| 8 Bedrooms | $2,166 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 72066 provides a clear picture of potential investment yields. The annualized Fair Market Rent (FMR) for a two-bedroom apartment in the metropolitan area, as of fiscal year 2026, is set at $970. This figure represents the government's benchmark for rental subsidies within the program.
Given that the median home value for ZIP 72066 is not available, we must consider the implications of this missing data on our analysis. However, we can still provide a useful comparison between the Section 8 rental subsidy and the market rent, which is also not available according to the data provided.
In the case where the market rent aligns with the FMR of $970, the implied gross yield can be calculated using the renter density and days on market (DOM). With a renter density of 9.0%, it suggests that the occupancy rate for properties seeking Section 8 tenants would be relatively stable. The lack of specific DOM data means we cannot precisely estimate the vacancy periods, but assuming a competitive market, we can infer that properties might achieve near full occupancy throughout the year.
To calculate the gross yield, we need to consider the total annual rental income generated by a property. For a two-bedroom unit, this would be $970 multiplied by 12 months, equaling $11,640 annually. Without the median home value, a direct cap-rate calculation is not possible; however, if we hypothetically assume a median home value, say $150,000, the gross yield would be approximately 7.76%. This is derived by dividing the annual rental income ($11,640) by the property value ($150,000).
Considering the scenario where the market rent exceeds the FMR, the gross yield would naturally increase. If the market rent were hypothetically higher, say $1,200 per month, the annual rental income would rise to $14,400. Using the same hypothetical median home value of $150,000, the gross yield would then be 9.6%, indicating a more favorable investment scenario.
However, it is important to note that the second scenario is speculative due to the unavailability of market rent data. Given the 9.0% renter density, the first scenario, based on the FMR, is more likely to reflect the actual rental environment for Section 8 participants in ZIP 72066. This lower gross yield should be carefully weighed against the stability of income provided by the Section 8 program, which guarantees rent payments directly from the government.
Investors should focus on the reliability of cash flow rather than solely on the gross yield when considering Section 8 investments. The guaranteed nature of the subsidy payments can offset the lower gross yield, making it a secure option for those looking to diversify their rental portfolio without the risk associated with market fluctuations.
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.