Location: Pontotoc County, OK | Metro: Coal County, OK
| Unit Size | Monthly FMR |
|---|---|
| Studio | $830 |
| 1 Bedroom | $840 |
| 2 Bedrooms | $1,100 |
| 3 Bedrooms | $1,500 |
| 4 Bedrooms | $1,740 |
| 5 Bedrooms | $2,018 |
| 6 Bedrooms | $2,260 |
| 7 Bedrooms | $2,441 |
| 8 Bedrooms | $2,563 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 74572 provides a clear picture of the investment potential in this area. To begin with, the Fair Market Rent (FMR) for a two-bedroom apartment in the metro area for fiscal year 2026 is set at an annualized rate of $1,200. This figure, however, does not directly translate into a gross yield that accurately reflects the typical rental income in the region. The Census ACS data indicates a market rent of $886 per month, which is a more reliable metric for assessing actual rental income.
Using the FMR of $1,200, the implied gross yield would be approximately 1.05%. This calculation is derived from dividing the annualized FMR ($1,200) by the median home value ($114,132). However, when using the market rent of $886, the implied gross yield is significantly higher at 9.67%. This is calculated by multiplying the monthly market rent ($886) by 12 months and then dividing by the median home value ($114,132).
The disparity between these two yields highlights the importance of considering real-world rental rates rather than government-set FMRs when evaluating investment properties. Given the low renter density of 14.9%, it is unlikely that the majority of homes in ZIP 74572 are rented out. This suggests that the FMR scenario may not be reflective of the actual rental market conditions. Additionally, the lack of data on days on market (DOM) makes it difficult to assess how quickly properties can be leased, further supporting the use of market rent data for a more accurate analysis.
In conclusion, while the FMR provides a baseline for rental assistance, the market rent of $886 per month offers a more realistic assessment of the gross yield at 9.67%. Landlords and small-portfolio investors should focus on this figure when making investment decisions in ZIP 74572. The higher gross yield based on market rent aligns better with the economic realities faced by property owners in the area.
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.