Location: Mississippi County, AR | Metro: Jonesboro, AR HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $750 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $940 |
| 3 Bedrooms | $1,270 |
| 4 Bedrooms | $1,340 |
| 5 Bedrooms | $1,554 |
| 6 Bedrooms | $1,740 |
| 7 Bedrooms | $1,879 |
| 8 Bedrooms | $1,973 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 72419 provides a clear picture of potential rental yields based on the Federal Market Rent (FMR) and market rent figures. The annualized 2-bedroom FMR for ZIP 72419 in fiscal year 2024 is $810, while the Census ACS reported market rent for a similar unit is $622.
To calculate the gross yield, we divide the annual rent by the median home value. For the FMR scenario, the gross yield is calculated as follows:
In contrast, using the market rent figure, the gross yield is:
The implied gross yield from the FMR scenario is higher at 8.18%, compared to the 6.27% from the market rent scenario. However, the reality of the rental market must be considered when evaluating these yields. With a renter density of 28.8%, it suggests that a significant portion of the population in ZIP 72419 owns their homes, potentially reducing the demand for rental properties.
The lack of data on the number of days on market (DOM) makes it challenging to assess how quickly rental units are filled. However, given the lower renter density, the market rent scenario might be more realistic. Landlords should prepare for a lower occupancy rate and possibly longer vacancy periods, which would impact the overall profitability.
In conclusion, while the FMR scenario presents a more attractive gross yield, the actual performance may align more closely with the market rent scenario due to the lower renter density in the area. Investors should use these figures as a starting point for their own detailed financial analyses, taking into account the specific dynamics of the ZIP 72419 rental market.
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.