Location: Newton County, AR | Metro: Johnson County, AR
| Unit Size | Monthly FMR |
|---|---|
| Studio | $650 |
| 1 Bedroom | $710 |
| 2 Bedrooms | $910 |
| 3 Bedrooms | $1,130 |
| 4 Bedrooms | $1,290 |
| 5 Bedrooms | $1,496 |
| 6 Bedrooms | $1,676 |
| 7 Bedrooms | $1,810 |
| 8 Bedrooms | $1,901 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 72854 reveals some key insights into the potential rental income and property values in this area. The Fair Market Rent (FMR) for a 2-bedroom apartment in the metropolitan area for fiscal year 2026 is set at $880 per month. This figure annualizes to $10,560, providing a baseline for understanding the maximum allowable rental subsidy that can be claimed under the Section 8 program.
Given that the median home value in ZIP 72854 is not available, we must consider alternative metrics to estimate the gross yield. However, the lack of market rent data means we cannot directly compare it against the FMR to derive an accurate gross yield. Despite this, we can still provide a general framework for how these figures might translate into investment returns.
In the scenario where the market rent aligns with the FMR, the gross yield would be based solely on the annualized rental income of $10,560. To calculate the gross yield, we need the median home value, which is currently unavailable. Assuming a median home value, say $200,000 for illustrative purposes, the gross yield would be approximately 5.28%. This is derived by dividing the annualized rental income ($10,560) by the median home value ($200,000).
The 2.2% renter density suggests that the majority of residents in ZIP 72854 prefer homeownership over renting. This implies that finding tenants willing to participate in the Section 8 program could be challenging. Additionally, the N/A-day days on market (DOM) indicates that there is either insufficient data or the market is not actively tracking this metric, making it difficult to assess how quickly properties are rented out.
Without specific market rent figures, it's challenging to provide a precise gross yield comparison. However, if the actual market rent were higher than the FMR, the gross yield would naturally increase. For example, if the market rent for a similar property was $1,200 per month, the annualized market rent would be $14,400. Using the same assumed median home value of $200,000, the gross yield would then be approximately 7.2%, significantly higher than the 5.28% calculated using the FMR.
The higher gross yield based on market rent is more likely to reflect reality, given that landlords aim to maximize income while adhering to the Section 8 guidelines. However, achieving this higher rent in a low-density rental market like ZIP 72854 could be problematic. Landlords should consider the balance between maximizing income and ensuring tenant stability when setting rents.
Ultimately, the cap-rate for Section 8 properties in ZIP 72854 will depend on the actual median home value and the market rent. Investors should use the provided FMR as a starting point and adjust their expectations based on local market conditions and tenant demand.
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.