Location: Randolph County, AR | Metro: Randolph County, AR
| Unit Size | Monthly FMR |
|---|---|
| Studio | $650 |
| 1 Bedroom | $690 |
| 2 Bedrooms | $910 |
| 3 Bedrooms | $1,260 |
| 4 Bedrooms | $1,270 |
| 5 Bedrooms | $1,473 |
| 6 Bedrooms | $1,650 |
| 7 Bedrooms | $1,782 |
| 8 Bedrooms | $1,871 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 72460 provides a detailed insight into potential rental income scenarios for landlords and small-portfolio investors. The Federal Market Rent (FMR) for a two-bedroom apartment in this area is set at $880 per month for fiscal year 2026, based on metro-level data. Meanwhile, the Census ACS reports a market rent of $567 per month for similar units.
To annualize these figures, we multiply by 12 months. This gives us an annualized FMR of $10,560 and a market rent of $6,804 for a two-bedroom unit. Given that the median home value is not available for ZIP 72460, we cannot directly calculate a precise cap rate. However, we can infer the gross yield from these rental figures.
The implied gross yield for the Section 8 scenario, using the $880 monthly rent, is significantly higher than the market rent scenario. For instance, if a property were valued at $100,000, the annualized Section 8 rent would represent a gross yield of approximately 10.56%. In contrast, the market rent would imply a gross yield of around 6.80%. These yields are before expenses and reflect the raw income potential from the two different rent sources.
Considering the 10.5% renter density in ZIP 72460, it's important to note that the number of days on market (DOM) is not available. This missing data point makes it challenging to assess the speed at which properties are typically leased. However, the higher gross yield associated with Section 8 rents suggests a more stable and predictable income stream, which can be attractive for investors looking for consistent cash flow.
The lower gross yield from market rents might be offset by faster leasing times and potentially fewer administrative burdens, although this is speculative without the DOM figure. Investors should weigh the benefits of guaranteed income against the potential for quicker turnover and less paperwork.
In conclusion, while the exact cap rate cannot be determined due to the lack of median home value data, the gross yield comparison clearly shows that Section 8 rents offer a more lucrative income opportunity at $10,560 annually compared to the market rent of $6,804. This makes the Section 8 option more realistic for achieving higher returns, assuming the property can be acquired at a reasonable price relative to the rental income.
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.