Location: St. Francis County, AR | Metro: Memphis, TN-MS-AR HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $770 |
| 1 Bedroom | $850 |
| 2 Bedrooms | $1,000 |
| 3 Bedrooms | $1,260 |
| 4 Bedrooms | $1,460 |
| 5 Bedrooms | $1,694 |
| 6 Bedrooms | $1,897 |
| 7 Bedrooms | $2,049 |
| 8 Bedrooms | $2,151 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 72348 reveals interesting insights into potential investment opportunities. Based on the Fair Market Rent (FMR) for a 2-bedroom apartment at $930 per month, the annualized rental income would be $11,160. Given the median home value in this area is $159,215, the implied gross yield using the FMR figure is approximately 7.01%. This calculation provides a benchmark for the rental income that can be expected from properties in this ZIP code under the Section 8 program.
However, when comparing this to the market rent of $479 per month as reported by the Census Bureau's American Community Survey (ACS), the annualized rental income drops to $5,748. Using the same median home value, this scenario yields an implied gross yield of about 3.61%. The stark difference between these two gross yields highlights the importance of understanding the local rental environment and the specific terms of Section 8 contracts.
Given the 27.4% renter density in ZIP 72348, it is clear that a significant portion of the population relies on rental housing, making the demand for such units robust. However, the lack of data regarding the days-on-market (DOM) for rental properties suggests that there might be challenges in accurately predicting the speed at which a property can be leased. Despite this uncertainty, the higher gross yield based on the FMR figure appears more realistic for several reasons.
First, the FMR is specifically designed to reflect the average rents for moderate-quality apartments in a given area, making it a reliable indicator for Section 8 payments. Second, the lower gross yield based on the ACS-reported market rent does not take into account the potentially higher stability and lower vacancy rates associated with Section 8 tenants, who are typically more reliable due to the government subsidy covering a significant portion of the rent.
In conclusion, while the market rent suggests a gross yield of 3.61%, the Section 8 FMR implies a much more attractive gross yield of 7.01%. Landlords and small-portfolio investors should consider the FMR figure as a more accurate representation of potential rental income in ZIP 72348, especially when evaluating properties for participation 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.