Location: Lamoille County, VT | Metro: Lamoille County, VT
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,840 |
| 1 Bedroom | $1,850 |
| 2 Bedrooms | $2,300 |
| 3 Bedrooms | $3,180 |
| 4 Bedrooms | $3,190 |
| 5 Bedrooms | $3,700 |
| 6 Bedrooms | $4,144 |
| 7 Bedrooms | $4,476 |
| 8 Bedrooms | $4,700 |
U.S. Census Bureau data (2024)
To determine if you should invest in ZIP code 05442 for Section 8 properties, follow this decision tree based on the provided data:
1) Does the Fair Market Rent (FMR) of $2,020 cover the debt service on a property valued at $325,354?
No. The FMR does not cover the debt service. To understand why, let's break down the numbers. Assuming a typical mortgage rate of around 4%, the annual debt service on a $325,354 property would be approximately $13,014 ($325,354 * 0.04). This equates to a monthly debt service of about $1,084. Since the FMR is $2,020 per month, it might initially seem sufficient. However, landlords must also consider maintenance costs, insurance, property taxes, and other expenses that can significantly reduce the net income. Therefore, the FMR alone is not enough to ensure profitability when covering all associated costs.
It depends. If your investment strategy includes cost savings through low-interest rates, high down payments, or tax benefits, the FMR could potentially cover the debt service. However, these factors need to be carefully evaluated against the overall financial health of the property and the local market conditions.
2) How does the market rent of $1,542 compare to the FMR?
Below FMR. The market rent of $1,542 is below the FMR of $2,020. This indicates that Section 8 tenants can afford to pay more than what the average market rent suggests. Landlords who choose to participate in the Section 8 program can benefit from the higher guaranteed rental income compared to the volatile market rents.
3) Is there enough demand with 13.9% of residents being renters and the days on market (DOM) data being unavailable?
Yes. With 13.9% of the population being renters, there is a steady demand for rental properties. While the DOM data is missing, the percentage of renters suggests a reasonable level of demand. However, the lack of DOM data means that we cannot assess how quickly rental units are typically filled in this area, which is an important factor in evaluating the liquidity and attractiveness of the rental market.
It depends. Although the percentage of renters is positive, the absence of DOM data introduces uncertainty. A low DOM would indicate strong demand, while a high DOM would suggest otherwise. Without this information, you should consider other sources to gauge the speed at which rental properties are leased in ZIP 05442.
In conclusion, investing in ZIP 05442 for Section 8 properties hinges on your ability to manage costs effectively and the actual demand for rental properties, which remains somewhat uncertain due to the lack of DOM data. If you can control costs and there is strong demand, the higher guaranteed income from Section 8 could be attractive despite the initial FMR not fully covering debt service.
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.