Location: Rutland County, VT | Metro: Rutland County, VT
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,340 |
| 1 Bedroom | $1,350 |
| 2 Bedrooms | $1,760 |
| 3 Bedrooms | $2,100 |
| 4 Bedrooms | $2,450 |
| 5 Bedrooms | $2,842 |
| 6 Bedrooms | $3,183 |
| 7 Bedrooms | $3,438 |
| 8 Bedrooms | $3,610 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 05774 reveals some critical insights for landlords and small-portfolio investors. To begin, let's annualize the 2-bedroom Fair Market Rent (FMR) set at $1,520 for fiscal year 2026, which translates into an annual income of $18,240. Given the median home value of $344,696, the implied gross yield for the Section 8 scenario would be approximately 5.3%. This is calculated by dividing the annual rental income by the property value.
In contrast, using the market rent figure of $1,200, the annualized market rent income is $14,400. With the same median home value of $344,696, this implies a gross yield of about 4.2%. These yields provide a direct comparison between participating in the Section 8 program and renting at market rates.
The higher gross yield in the Section 8 scenario suggests that properties in ZIP 05774 could generate more income relative to their value if they participate in the Section 8 program. However, the decision should also consider the lower renter density of 6.6%, indicating a smaller pool of potential tenants. The Day on Market (DOM) data being N/A further complicates the assessment, as it does not provide insight into how quickly properties might be rented out under either scenario.
Given these figures, the Section 8 scenario offers a more attractive gross yield. However, the actual net operating income (NOI) will depend on factors such as maintenance costs, vacancy rates, and the specific terms of the housing assistance contract. Investors must weigh the benefits of a higher gross yield against the operational challenges posed by lower tenant demand and uncertain rental turnover times.
To summarize, the gross yield from Section 8 participation is 5.3%, compared to a 4.2% yield from market rents. This difference makes the Section 8 option more financially appealing on the surface, but it requires careful consideration of the local rental market dynamics and the specific requirements 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.