Location: Burlington-South Burlington, VT | Metro: Burlington-South Burlington, VT MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,660 |
| 1 Bedroom | $1,840 |
| 2 Bedrooms | $2,320 |
| 3 Bedrooms | $2,930 |
| 4 Bedrooms | $3,050 |
| 5 Bedrooms | $3,538 |
| 6 Bedrooms | $3,963 |
| 7 Bedrooms | $4,280 |
| 8 Bedrooms | $4,494 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 05477 provides insight into potential investment returns for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a two-bedroom apartment in this area, as of FY 2024, is set at $1790 per month. Annualizing this figure yields an annual rental income of $21,480. When compared to the median home value of $555,708, this translates to a gross yield of approximately 3.87%. This calculation assumes that the property would be rented out at the FMR rate year-round.
In contrast, the Census American Community Survey (ACS) indicates a market rent of $1,125 per month for a two-bedroom unit. Annualizing this market rent figure results in an annual rental income of $13,500. Given the median home value, this equates to a gross yield of about 2.43%. This scenario reflects the typical market conditions and rent levels in the area.
The FMR-based gross yield of 3.87% is significantly higher than the market rent-based gross yield of 2.43%. However, the reality of Section 8 participation must be considered alongside these figures. With a renter density of only 22.5%, landlords need to weigh the likelihood of finding tenants willing to participate in the Section 8 program. Additionally, the N/A-day DOM (days on market) suggests that there might be challenges in securing tenants quickly, which could affect the overall occupancy rate and thus the actual rental income.
Given these factors, while the FMR-based gross yield presents a more attractive return on investment, the market rent-based gross yield is likely a more realistic expectation for most landlords. The decision to participate in the Section 8 program should therefore be made with a thorough understanding of the local rental market dynamics and the specific requirements and benefits of the program.
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.