Location: Prairie County, AR | Metro: Little Rock-North Little Rock-Conway, AR HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $890 |
| 1 Bedroom | $900 |
| 2 Bedrooms | $1,040 |
| 3 Bedrooms | $1,390 |
| 4 Bedrooms | $1,640 |
| 5 Bedrooms | $1,902 |
| 6 Bedrooms | $2,130 |
| 7 Bedrooms | $2,300 |
| 8 Bedrooms | $2,415 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 72160 provides a clear picture of potential investment returns. Using the Federal Market Rent (FMR) for a 2-bedroom apartment at $950 per month, the annualized rental income comes to $11,400. This figure represents the maximum allowable rent set by the Housing Choice Voucher program, commonly known as Section 8. Against the median home value of $119,469, the implied gross yield for a Section 8 property is approximately 9.54%. This calculation is derived from dividing the annual rental income by the median home value.
In contrast, using the market rent figure of $849 per month for a 2-bedroom apartment, the annualized rental income is $10,188. The implied gross yield for a market-rent property in ZIP 72160 is about 8.52%. This is calculated similarly, by dividing the annual market rent by the median home value. These yields indicate that a Section 8 property would generate a higher gross yield compared to a market-rent property under these conditions.
Given the 44.4% renter density in ZIP 72160, it's important to note that a significant portion of the population relies on rental housing. However, the N/A-day Days on Market (DOM) suggests there might be limited data available regarding how quickly properties are rented out, which could impact the reliability of the gross-yield estimates. Despite this, the higher gross yield of 9.54% from Section 8 properties is more realistic due to the guaranteed nature of the rent payments, backed by federal subsidies. This stability can be particularly attractive to investors looking for consistent cash flow, even if the vacancy rate or other factors affecting net operating income (NOI) are not explicitly stated here.
While the market rent scenario offers a lower gross yield of 8.52%, it does not benefit from the same level of financial security as Section 8 properties. Investors must weigh the risks of market fluctuations against the certainty of federal support when choosing between these options. The choice ultimately depends on the investor's risk tolerance and investment strategy.
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.