Location: Burlington-South Burlington, VT | Metro: Burlington-South Burlington, VT MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,880 |
| 1 Bedroom | $2,090 |
| 2 Bedrooms | $2,630 |
| 3 Bedrooms | $3,320 |
| 4 Bedrooms | $3,460 |
| 5 Bedrooms | $4,014 |
| 6 Bedrooms | $4,496 |
| 7 Bedrooms | $4,856 |
| 8 Bedrooms | $5,099 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate picture for ZIP code 05494, located in West Virginia, reveals some interesting insights for landlords and small-portfolio investors. Using the Fair Market Rent (FMR) for a 2-bedroom apartment at $1460 per month (annualized to $17,520) and the Census ACS reported market rent at $2,561 per month (annualized to $30,732), we can calculate the implied gross yields based on the median home value of $527,884.
Firstly, when considering the annualized FMR of $17,520, the implied gross yield is approximately 3.32%. This calculation is derived by dividing the annual rental income by the median home value. In contrast, using the market rent figure of $30,732 per year, the implied gross yield increases significantly to about 5.82%.
The higher gross yield based on market rent suggests a more favorable investment scenario compared to the FMR-based yield. However, it's important to consider the context of ZIP 05494, where only 14.2% of residents are renters. This low renter density implies that there might be limited demand for rental properties, particularly those participating in the Section 8 program. The N/A-day Days on Market (DOM) indicates incomplete data, which could mean either a very quick or very slow market for rentals, making it difficult to assess the typical time it takes to lease a property.
In light of these factors, the FMR-based gross yield of 3.32% provides a more conservative and likely accurate representation of potential rental income for Section 8 properties in ZIP 05494. While the market rent yield of 5.82% appears more attractive, the actual achievable yield may be closer to the FMR due to the lower renter density and potential challenges in leasing Section 8 units. Investors should base their decisions on the conservative FMR yield while being aware of the potential for higher returns if they can secure tenants willing to pay market rates.
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.