Location: Millard County, UT | Metro: Millard County, UT
| Unit Size | Monthly FMR |
|---|---|
| Studio | $940 |
| 1 Bedroom | $960 |
| 2 Bedrooms | $1,260 |
| 3 Bedrooms | $1,740 |
| 4 Bedrooms | $1,810 |
| 5 Bedrooms | $2,100 |
| 6 Bedrooms | $2,352 |
| 7 Bedrooms | $2,540 |
| 8 Bedrooms | $2,667 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate picture for ZIP code 84636 reveals some key insights into the potential rental income and property values. The Federal Market Rent (FMR) for a two-bedroom apartment in the metro area is set at $1,380 annually, based on FY 2026 data. This figure is crucial for understanding the government-subsidized rental income that properties in this area can expect under the Section 8 program.
In contrast, the market rent for a similar two-bedroom apartment, according to the Census American Community Survey (ACS), stands at $1,117 per month. This indicates a higher annual rental income of $13,404 compared to the $16,560 annualized FMR under Section 8. However, the median home value for ZIP 84636 is not available, which makes it challenging to calculate an exact cap rate without additional property-specific data.
To derive the implied gross yield, we need to compare these rental incomes against typical property values. Since the median home value is not available, let's assume a hypothetical median home value for the purpose of this analysis. If the median home value were hypothetically $300,000, the gross yield would be calculated as follows:
Given the 19.1% renter density in ZIP 84636, it is important to note that a significant portion of the population may prefer homeownership over renting. This factor could influence the demand for rental properties, including those participating in the Section 8 program. Additionally, the lack of data regarding the days on market (DOM) suggests that either the market is stable, with quick turnover, or there is insufficient data to provide a reliable trend analysis.
The higher gross yield under the Section 8 program implies a more favorable return on investment compared to the market rent scenario. However, the reality of achieving this higher yield depends on several factors, such as the availability of Section 8 vouchers, tenant behavior, and maintenance costs. Given the lower renter density, the market rent scenario might be more realistic for most landlords and small-portfolio investors, unless they specifically target the Section 8 housing market.
In conclusion, while the Section 8 program offers a higher annualized rental income of $16,560 versus the market rent of $13,404, the choice between the two should consider the local rental market dynamics, including the relatively low renter density of 19.1%. Investors must weigh these factors carefully to determine the most viable strategy for their portfolios.
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.