Location: Orleans County, VT | Metro: Orleans County, VT
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,030 |
| 1 Bedroom | $1,080 |
| 2 Bedrooms | $1,320 |
| 3 Bedrooms | $1,700 |
| 4 Bedrooms | $1,850 |
| 5 Bedrooms | $2,146 |
| 6 Bedrooms | $2,404 |
| 7 Bedrooms | $2,596 |
| 8 Bedrooms | $2,726 |
U.S. Census Bureau data (2024)
A decision tree for evaluating whether to invest in ZIP code 05855 for Section 8 properties hinges on three key questions.
1. Does the Fair Market Rent (FMR) of $1,140 cover the debt service on a property valued at $267,184?
Yes: The FMR of $1,140 is sufficient to cover the debt service on a property priced at $267,184. This indicates that a landlord can expect rental income to meet their financial obligations without relying on additional sources of revenue.
No: If the FMR of $1,140 does not cover the debt service, then purchasing in ZIP 05855 would be financially unwise. Landlords must ensure that the rental income will at least cover the mortgage and other expenses associated with the property.
It Depends: This scenario arises if there's uncertainty about the exact debt service amount, which includes the mortgage payment, insurance, taxes, and maintenance costs. Calculating these costs precisely is necessary to determine if the FMR can indeed support the investment.
2. How does the market rent of $861 compare to the FMR of $1,140?
Market Rent Above FMR: If the market rent exceeds the FMR, then the property is likely to be overpriced for Section 8 tenants. In this case, landlords might struggle to find eligible tenants willing to pay the higher rent.
Market Rent Equal to FMR: When the market rent matches the FMR, the property is priced correctly for Section 8 eligibility. This scenario ensures that landlords can attract tenants without exceeding the rent limits set by the program.
Market Rent Below FMR: If the market rent is lower than the FMR, landlords can potentially charge the higher FMR rate and still attract tenants. However, they must also consider the demand for rental units in the area.
3. Is the combination of 28.5% of residents being renters and an unknown number of days on the market (DOM) indicative of sufficient demand?
Yes: With 28.5% of the population renting, there is a notable demand for rental properties. If the DOM is low, it suggests that available rentals are quickly occupied, indicating strong demand.
No: If the DOM is high, it implies that properties take longer to rent out, suggesting weak demand. Landlords should avoid investing in ZIP 05855 under such circumstances.
It Depends: Without specific DOM data, it's challenging to assess the exact level of demand. However, the 28.5% rental rate provides a positive signal. Landlords should further investigate local vacancy rates and the competition to make a final decision.
Based on the provided data, landlords should first confirm that the FMR covers their debt service. Then, they must evaluate the market rent relative to the FMR. Lastly, the percentage of renters and DOM data will determine if there is enough demand to justify the investment.
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.