Location: Washington County, VT | Metro: Caledonia County, VT
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,140 |
| 1 Bedroom | $1,150 |
| 2 Bedrooms | $1,340 |
| 3 Bedrooms | $1,810 |
| 4 Bedrooms | $2,190 |
| 5 Bedrooms | $2,540 |
| 6 Bedrooms | $2,845 |
| 7 Bedrooms | $3,073 |
| 8 Bedrooms | $3,227 |
U.S. Census Bureau data (2024)
When considering whether to invest in ZIP code 05843 for Section 8 properties, follow this decision tree:
1) Does the Fair Market Rent (FMR) of $1,280 cover the debt service on a $249,281 property?
Yes. The FMR of $1,280 per month is sufficient to clear the debt service on a property valued at $249,281. Assuming a standard mortgage rate and term, the monthly payment would be significantly lower than the FMR, ensuring that the landlord can meet financial obligations and maintain profitability.
No. If the debt service on a property valued at $249,281 exceeds $1,280 per month, then investing in ZIP 05843 for Section 8 purposes is not advisable. The landlord would struggle to cover costs, leading to financial strain.
It Depends. This scenario applies if the landlord's debt service is close to but not quite covered by the FMR. Additional considerations such as property taxes, insurance, and maintenance costs must be factored in to determine if the investment remains viable.
2) Is the market rent of $834 above, at, or below the FMR?
Above. If the market rent is higher than the FMR, landlords can charge the difference between the FMR and market rates for Section 8 units, enhancing overall profitability. This scenario suggests strong demand and favorable rental conditions.
At. When the market rent equals the FMR, landlords will receive exactly the FMR amount for Section 8 units, without additional income from the difference. This situation still allows for stable cash flows but offers limited upside potential.
Below. If the market rent is below the FMR, landlords might find themselves in a position where they cannot fully leverage the market value of their properties. However, they will still receive the FMR, which could be advantageous if the market rent is significantly lower.
3) Are 28.8% renters combined with an unspecified number of days Days on Market (DOM) enough demand?
Yes. With 28.8% of the population renting, there is a substantial base of potential tenants. If the DOM is low, indicating quick turnover and high demand, this further supports the viability of Section 8 investments.
No. If the DOM is high, suggesting slow turnover and weak demand, the investment in Section 8 properties may not be worthwhile. High DOM implies challenges in finding and retaining tenants, which can affect cash flow and profitability.
It Depends. If the DOM is moderate, the decision hinges on other factors such as vacancy rates, competition, and the landlord's ability to manage properties effectively. A moderate DOM coupled with a decent percentage of renters can still make for a reasonable investment.
To conclude, the suitability of ZIP 05843 for Section 8 investments largely depends on the landlord's ability to clear debt service with the FMR, the relationship between market rent and FMR, and the strength of tenant demand as reflected in the percentage of renters and DOM. Careful analysis of these factors will guide informed decisions.
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.