Location: San Juan-Guaynabo, PR | Metro: San Juan-Guaynabo, PR HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $640 |
| 1 Bedroom | $650 |
| 2 Bedrooms | $760 |
| 3 Bedrooms | $990 |
| 4 Bedrooms | $1,200 |
| 5 Bedrooms | $1,392 |
| 6 Bedrooms | $1,559 |
| 7 Bedrooms | $1,684 |
| 8 Bedrooms | $1,768 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 00911 in Connecticut reveals some interesting insights when comparing the Federal Market Rent (FMR) and the market rent. The FMR for a 2-bedroom apartment is set at $820 per month, which annualizes to $9,840. Meanwhile, the market rent stands at $698 per month, totaling $8,376 annually.
To derive the gross yield, we need to consider the median home value. However, the median home value for ZIP 00911 is not available, making it challenging to calculate an exact cap rate. Despite this limitation, we can still compare the gross yields based on the monthly rents provided.
In the scenario where a landlord accepts Section 8 tenants, the gross yield would be higher due to the higher rental amount. With a Section 8 rent of $820 per month, the gross yield is significantly better than the market rent of $698 per month. This implies that if a property owner were to rely solely on Section 8 rents, they would see a higher return on investment compared to renting at market rates.
Given the 50.0% renter density in the area, it's important to note that while Section 8 rents offer a higher gross yield, the reality of finding eligible tenants and navigating the Section 8 program can affect the overall profitability. The lack of data on days-on-market (DOM) also means that we cannot accurately assess how quickly properties might be rented out under either scenario.
Despite these uncertainties, the higher gross yield from Section 8 rents suggests a potentially more attractive investment opportunity, assuming the property can be filled consistently with Section 8 tenants. However, the decision should also take into account the administrative overhead and the potential challenges in maintaining a steady stream of Section 8 tenants.
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.