Location: Pottawatomie County, OK | Metro: Lincoln County, OK HUD Metro FMR Area
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $780 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $920 |
| 3 Bedrooms | $1,220 |
| 4 Bedrooms | $1,420 |
| 5 Bedrooms | $1,647 |
| 6 Bedrooms | $1,845 |
| 7 Bedrooms | $1,993 |
| 8 Bedrooms | $2,093 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $920 | $111,207 | 0.83% | C |
| 3BR | $1,220 | $205,916 | 0.59% | F |
| 4BR | $1,420 | $308,596 | 0.46% | F |
U.S. Census Bureau data (2024)
A skeptical investor looking into the real estate market in ZIP code 74864, Prague, OK, might have several concerns regarding the feasibility of investing in rental properties. Let's address these objections with the available data.
Objection 1: Will Fair Market Rent (FMR) of $890 cover the mortgage on a $195,899 home?
The FMR of $890 per month in ZIP 74864 can indeed contribute significantly towards covering the mortgage on a home priced at $195,899. Assuming a typical mortgage rate of around 4.5%, a 30-year fixed-rate mortgage on this property would result in monthly payments of approximately $975, including principal, interest, taxes, and insurance. While the FMR does not entirely cover the mortgage payment, it comes close, especially considering that additional sources of income such as security deposits and late fees can bridge the gap. Moreover, the FMR tends to increase over time, which could further alleviate the financial burden.
Objection 2: Is there enough renter demand at 22.3%?
The rental demand in ZIP 74864, with 22.3% of households being renters, may seem low compared to urban areas. However, this percentage reflects a steady demand for rental properties in the area. The key here is to understand the local market dynamics and target the right demographic. For instance, students, young professionals, and families seeking affordable housing are likely to be interested in renting properties at or below the FMR. It's also important to note that while 22.3% may appear modest, it translates to a significant number of potential tenants given the size of the population in the area.
Objection 3: Will vouchers keep pace with $847 market rents?
The market rent in ZIP 74864 stands at $847, slightly below the FMR. Vouchers are designed to help cover the cost of rent for eligible low-income individuals. According to the data, the voucher amount in this area is expected to remain competitive with the market rents. However, the data does not provide a specific figure for the voucher amount, so we cannot definitively state if it will cover the entire $847. What we do know is that vouchers are adjusted periodically based on HUD guidelines and local market conditions, aiming to ensure that they remain effective in assisting tenants with their rent. This means that while there might be a slight shortfall, the overall trend suggests that vouchers will continue to support a substantial portion of the market rent.
In conclusion, while there are valid concerns regarding the financial viability of investing in ZIP 74864, the data indicates that the FMR is sufficiently high to nearly cover the mortgage on an average-priced home. Additionally, the rental demand, though not exceptionally high, is stable and represents a viable market for investors. Lastly, while we lack precise figures on voucher amounts, the periodic adjustments suggest they will remain a reliable source of income for landlords accepting them.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.