Location: Orange County, VT | Metro: Orange County, VT
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,180 |
| 1 Bedroom | $1,470 |
| 2 Bedrooms | $1,690 |
| 3 Bedrooms | $2,160 |
| 4 Bedrooms | $2,290 |
| 5 Bedrooms | $2,656 |
| 6 Bedrooms | $2,975 |
| 7 Bedrooms | $3,213 |
| 8 Bedrooms | $3,374 |
U.S. Census Bureau data (2024)
A decision tree for evaluating whether to purchase a property in ZIP code 05033 for Section 8 investment involves three key questions:
1) Does the Fair Market Rent (FMR) of $1,330 cover the debt service on a property valued at $292,982?
If the answer is yes, proceed to the next question. In ZIP 05033, the FMR of $1,330 is the amount that HUD has determined as sufficient to cover the average rent and utility costs for a modest house or apartment. This figure must exceed the total monthly mortgage payment, including principal, interest, taxes, and insurance, to ensure profitability.
If the answer is no, do not invest. A property priced at $292,982 will likely have a higher debt service than the FMR can support, leading to financial losses.
2) How does the market rent of $1,167 compare to the FMR?
If market rent is below the FMR, which it is in this case, then Section 8 properties are more competitive in the rental market. Landlords can attract tenants more easily, as the FMR is often higher than what many can afford on their own.
If market rent is equal to or above the FMR, landlords would face stiffer competition from private rentals. However, since the market rent is $1,167, landlords can expect an advantage when renting to Section 8 tenants.
3) Is there sufficient demand, considering 12.7% of residents are renters and the days on market (DOM) is not available?
If the percentage of renters is high enough to sustain demand, then the answer is yes. With 12.7% of residents being renters, there is a steady pool of potential Section 8 tenants. However, the lack of DOM data makes it difficult to assess how quickly units might be filled. Despite this, the percentage of renters suggests there is demand.
If you need more certainty about the speed of filling vacancies, the answer is it depends. The Days on Market data would provide insight into how quickly properties are rented out. Without this data, you cannot fully gauge the speed of occupancy, which is crucial for cash flow planning.
In conclusion, if the FMR of $1,330 covers the debt service on a property valued at $292,982 and the 12.7% of residents who are renters indicates strong demand, then the answer is yes. The lower market rent of $1,167 supports the attractiveness of Section 8 properties to tenants. However, without knowing the DOM, landlords must consider other factors such as local vacancy rates and economic trends to make a fully informed decision.
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.