Location: Burlington-South Burlington, VT | Metro: Burlington-South Burlington, VT MSA
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 | $1,730 |
| 1 Bedroom | $1,920 |
| 2 Bedrooms | $2,420 |
| 3 Bedrooms | $3,060 |
| 4 Bedrooms | $3,180 |
| 5 Bedrooms | $3,689 |
| 6 Bedrooms | $4,132 |
| 7 Bedrooms | $4,463 |
| 8 Bedrooms | $4,686 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,920 | $317,992 | 0.6% | D |
| 2BR | $2,420 | $420,182 | 0.58% | F |
| 3BR | $3,060 | $580,702 | 0.53% | F |
| 4BR | $3,180 | $700,237 | 0.45% | F |
| 5BR | $3,689 | $766,167 | 0.48% | F |
U.S. Census Bureau data (2024)
Burlington, Vermont's ZIP code 05401 is a bustling urban neighborhood situated within the city limits. With a total population of 31,662, it stands out due to its high percentage of renters at 68.6%, indicating a strong demand for rental properties. The median household income in this area is $65,657, reflecting a middle-class community that is economically stable but not wealthy. The median home value in ZIP 05401 is $556,482, suggesting that homeownership is relatively expensive compared to the median income, which further supports the high rental rate.
The rent economics in ZIP 05401 are favorable for investors. The Fair Market Rent (FMR), which is the amount set by the U.S. Department of Housing and Urban Development (HUD) for the fiscal year 2024, is $2,010. In contrast, the market rent, as indicated by the Zillow Observed Rent Index (ZORI), is slightly higher at $2,060. This means that HUD's FMR is very close to the actual market rates, providing a good benchmark for landlords who wish to participate in the Section 8 program. For those who choose to operate outside of the voucher program, the market rent offers a modest premium over the FMR, indicating a competitive yet fair rental environment.
Given the economic profile and the rent dynamics in ZIP 05401, it is well-suited for both hands-off voucher operators and hands-on value-add buyers. Voucher operators can rely on the stability offered by the Section 8 program, knowing that their rental income will be consistent and backed by government subsidies. On the other hand, value-add buyers can capitalize on the slight difference between the FMR and market rent, potentially increasing their cash flow through property improvements and efficient management practices. Both strategies have merit in this vibrant neighborhood, where the high proportion of renters ensures a steady demand for quality housing options.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.