Location: Boston-Cambridge-Quincy, MA | Metro: Boston-Cambridge-Quincy, MA-NH HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $2,130 |
| 1 Bedroom | $2,230 |
| 2 Bedrooms | $2,650 |
| 3 Bedrooms | $3,180 |
| 4 Bedrooms | $3,510 |
| 5 Bedrooms | $4,072 |
| 6 Bedrooms | $4,561 |
| 7 Bedrooms | $4,926 |
| 8 Bedrooms | $5,172 |
The analysis of the Section 8 cap rate for ZIP code 01961 in Massachusetts provides insight into potential investment opportunities. The Fair Market Rent (FMR) for a two-bedroom apartment in fiscal year 2024 is set at $2380 annually. However, the median home value and market rent figures are currently unavailable, leading to some limitations in the analysis.
To calculate the implied gross yield, we need to consider the FMR and compare it against the median home value. Given that the median home value is not available, we cannot provide an exact gross yield percentage. However, we can still discuss the implications of using the FMR in the context of a rental property.
The implied gross yield using the FMR would be calculated based on the annual rental income relative to the property's value. Since the median home value is not provided, we cannot compute this figure directly. But it is important to note that the gross yield would be significantly lower than what might be expected from market rents, assuming they are higher than the FMR.
Without specific data on market rents, it is challenging to provide a direct comparison. However, it is generally understood that market rents tend to be higher than the FMR, which is designed to ensure affordable housing options. Therefore, the gross yield based on market rents would likely be higher than the one derived from the FMR.
Given the lack of information on renter density and days on market (DOM), we cannot definitively state which scenario is more realistic. However, the FMR-based gross yield is a conservative estimate and useful for risk management. It ensures that the investment remains viable even under less favorable market conditions.
In conclusion, while the exact gross yield cannot be determined due to missing data points, the use of the FMR for a two-bedroom apartment at $2380 annually provides a baseline for investment considerations. Landlords and small-portfolio investors should be prepared to conduct further research to understand local market dynamics and adjust their expectations accordingly.
Data Sources: FMR data from HUD (2027).
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.