Location: Burlington-South Burlington, VT | Metro: Burlington-South Burlington, VT MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,600 |
| 1 Bedroom | $1,780 |
| 2 Bedrooms | $2,240 |
| 3 Bedrooms | $2,830 |
| 4 Bedrooms | $2,940 |
| 5 Bedrooms | $3,410 |
| 6 Bedrooms | $3,819 |
| 7 Bedrooms | $4,125 |
| 8 Bedrooms | $4,331 |
The analysis for ZIP code 05406 in Vermont reveals some limitations due to missing data points, particularly regarding the median home value and market rent figures. However, we can still derive a basic understanding of the potential Section 8 cap rate scenario using the available Fair Market Rent (FMR) for a two-bedroom unit, which is set at $1950 annually for fiscal year 2024.
To calculate the gross yield, we need to estimate the implied annual rental income based on the FMR and compare it to the median home value. Unfortunately, without a specific median home value, we cannot provide an exact gross yield percentage. Nevertheless, assuming a hypothetical median home value, let's illustrate how the calculation would work.
If the median home value were hypothetically $250,000, the implied gross yield using the FMR would be approximately 7.8%. This is calculated by taking the annualized FMR ($1950) and dividing it by the median home value ($250,000), multiplied by 100 to get a percentage. The formula is as follows:
Gross Yield = (Annualized FMR / Median Home Value) * 100
Given that the market rent figure is currently unavailable, we cannot perform a similar calculation for the market rent scenario. However, if the market rent were higher than the FMR, the gross yield would likely increase, making the investment more attractive from a purely rental income perspective.
When considering the N/A% renter density and the N/A-day Days on Market (DOM), these factors suggest that there is insufficient data to draw a definitive conclusion about the relative attractiveness of the market versus the Section 8 scenario. A higher renter density typically indicates a stronger demand for rental properties, which could support higher market rents. Similarly, a lower DOM suggests that rental units are being leased quickly, which is generally positive for landlords.
In the absence of specific market rent and median home value data, the FMR-based gross yield provides a baseline for evaluating potential returns. Investors should consider supplementing this analysis with additional research on local market conditions, including recent trends in renter density and DOM, to make informed decisions about their investments in ZIP 05406.
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.