Location: Washington County, VT | Metro: Washington County, VT
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,240 |
| 1 Bedroom | $1,360 |
| 2 Bedrooms | $1,780 |
| 3 Bedrooms | $2,230 |
| 4 Bedrooms | $2,340 |
| 5 Bedrooms | $2,714 |
| 6 Bedrooms | $3,040 |
| 7 Bedrooms | $3,283 |
| 8 Bedrooms | $3,447 |
The analysis of the Section 8 cap rate for ZIP code 05601 in Unknown, VT, is based on the fiscal year 2026 Fair Market Rent (FMR) for a two-bedroom apartment, which is set at $1,480 per month. This figure represents the maximum monthly rental amount that a landlord can charge under the Section 8 program.
First, let's annualize the FMR. At $1,480 per month, the annual rent would be $17,760. Given that the median home value in this area is not available, we cannot directly calculate a cap rate. However, we can estimate the gross yield by comparing the annualized FMR to typical home values in similar areas, though exact figures for Unknown, VT, are not provided.
In scenarios where median home values are known, the gross yield is calculated by dividing the annual rent by the home value. For instance, if we hypothetically assume a median home value of $300,000, the gross yield would be approximately 5.92%. This calculation is purely illustrative due to the lack of specific data for ZIP 05601.
The market rent for the area is also not available, making it difficult to compare the gross yield between the Section 8 rent and the market rent. However, in many cases, the market rent exceeds the Section 8 rent, leading to a lower gross yield when using market rent figures. The exact difference in gross yields depends on the actual market rent, which would need to be researched further.
The renter density and days on market (DOM) are also not specified, which are critical factors in determining the feasibility of renting out properties under the Section 8 program. Typically, higher renter density and shorter DOM suggest a more favorable environment for rental properties.
Given the limited data, the scenario using the Section 8 FMR ($1,480/month) provides a clearer benchmark for potential income. While the implied gross yield of around 5.92% is based on an assumed median home value, it offers a starting point for investors to assess the potential returns. The actual gross yield could vary depending on the true median home value and market conditions.
In conclusion, while the precise cap rate cannot be determined without additional data, the gross yield derived from the Section 8 FMR gives a tangible figure for investment consideration. Landlords and small-portfolio investors should use this as a baseline and conduct further research into local market rents and property values to refine their investment analysis.
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.