Location: Yell County, AR | Metro: Scott County, AR
| Unit Size | Monthly FMR |
|---|---|
| Studio | $650 |
| 1 Bedroom | $700 |
| 2 Bedrooms | $910 |
| 3 Bedrooms | $1,130 |
| 4 Bedrooms | $1,280 |
| 5 Bedrooms | $1,485 |
| 6 Bedrooms | $1,663 |
| 7 Bedrooms | $1,796 |
| 8 Bedrooms | $1,886 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 72841 reveals a challenging investment environment due to limited data points. The Federal Market Rent (FMR) for a 2-bedroom unit, annualized at $880 for fiscal year 2026, provides a baseline for calculating the implied gross yield. However, without a specific median home value or market rent figure, we can only make broad comparisons.
In the scenario where the median home value is known, the implied gross yield would be calculated based on the annualized FMR of $880. This yield represents the annual rental income as a percentage of the property's value. For instance, if the median home value were hypothetically $200,000, the implied gross yield would be 0.44%, calculated as ($880 / $200,000) * 100. This figure is significantly lower than typical market yields, indicating that Section 8 properties in ZIP 72841 might offer lower returns compared to conventional rental investments.
The lack of market rent data complicates a direct comparison between Section 8 rents and market rents. Typically, market rent is higher than FMR, which could imply a higher gross yield for non-Section 8 properties. However, the exact difference cannot be quantified here due to the missing information. Given the 25.9% renter density, it suggests that a significant portion of the population is already renting, which could indicate a competitive rental market. However, the Days on Market (DOM) data being unavailable makes it difficult to assess how quickly properties are rented out and the level of competition among landlords.
Based on the available data, the implied gross yield from Section 8 rentals is lower, likely due to the fixed payment standard set by the government. This contrasts with the potential for higher yields from market-rate rentals, assuming they command a premium over the FMR. Investors should consider the stability of Section 8 income versus the variability of market rates when making decisions. Additionally, the lower gross yield from Section 8 might be offset by the security of long-term tenant contracts and government subsidies, though these factors do not directly affect the gross yield calculation.
To conclude, while the exact market rent and median home value are necessary to provide a precise comparison, the current data suggests that Section 8 properties in ZIP 72841 will have a lower gross yield compared to market-rate rentals. The decision to invest in Section 8 properties should weigh the lower yield against the benefits of stable income and government support.
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.