Location: Noble County, OK | Metro: Pawnee County, OK HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $700 |
| 1 Bedroom | $740 |
| 2 Bedrooms | $920 |
| 3 Bedrooms | $1,210 |
| 4 Bedrooms | $1,520 |
| 5 Bedrooms | $1,763 |
| 6 Bedrooms | $1,975 |
| 7 Bedrooms | $2,133 |
| 8 Bedrooms | $2,240 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 74644 reveals a nuanced picture when comparing the Federal Market Rent (FMR) and the actual market rent figures. For a two-bedroom unit, the annualized FMR set at $890 for fiscal year 2024 implies a gross yield of approximately 2.4%. This calculation is derived by multiplying the monthly FMR by 12 and dividing it by the median home value of $145,707.
In contrast, the market rent figure of $594 per month, as reported by the Census Bureau's American Community Survey (ACS), suggests a significantly lower gross yield of around 1.6%. This is calculated similarly by annualizing the market rent and then dividing by the median home value.
The disparity between these two yields highlights the importance of understanding the local rental market dynamics. Given the 9.7% renter density in ZIP 74644, it's clear that the majority of residents are homeowners, which can influence the demand for rental properties. However, the specific demand for Section 8 subsidized rentals is not directly reflected in the overall renter density.
The N/A-day Days on Market (DOM) indicates an incomplete dataset regarding how quickly rental units are typically occupied. This lack of information makes it challenging to assess the vacancy rates and thus the reliability of the FMR versus the market rent in generating consistent income.
Considering the lower market rent of $594 compared to the FMR of $890, the 1.6% gross yield is likely more realistic for most landlords and small-portfolio investors. The higher FMR represents a government-set rate designed to cover costs and provide a margin for landlords, but it does not necessarily reflect the competitive rental market conditions.
While Section 8 contracts offer stability and reduced vacancy risk, the implied gross yield based on the FMR should be viewed with caution. Landlords must weigh the benefits of guaranteed rental payments against the potential for achieving higher yields through market-rate rentals, despite the associated risks.
To conclude, the gross yield from Section 8 participation at the FMR level of $890 is 2.4%, while the market rent scenario yields a gross return of 1.6%. Given the limited data on DOM and the low renter density, the latter figure is more likely to represent typical rental income in ZIP 74644.
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.