Location: Washington County, VT | Metro: Caledonia County, VT
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,170 |
| 1 Bedroom | $1,220 |
| 2 Bedrooms | $1,460 |
| 3 Bedrooms | $1,940 |
| 4 Bedrooms | $2,240 |
| 5 Bedrooms | $2,598 |
| 6 Bedrooms | $2,910 |
| 7 Bedrooms | $3,143 |
| 8 Bedrooms | $3,300 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap rate scenario for ZIP code 05873 reveals a stark contrast between the Federal Market Rent (FMR) and the market rent, which significantly impacts the gross yield potential for landlords and small-portfolio investors.
Based on the data provided, the annualized 2BR FMR for ZIP 05873 is $1,480 per month, or $17,760 annually (FY 2026, metro). The median home value in this area is $345,859. Using these figures, the implied gross yield for a Section 8 property is approximately 5.13%. This is calculated by dividing the annual FMR ($17,760) by the median home value ($345,859).
In contrast, the market rent for a 2BR property in ZIP 05873 is $871 per month, or $10,452 annually (Census ACS). When we apply this market rent to the median home value, the implied gross yield drops to about 3.02%. This is derived by dividing the annual market rent ($10,452) by the median home value ($345,859).
The gross yield comparison clearly favors the Section 8 scenario over the market rent scenario. However, the decision on which scenario is more realistic depends heavily on the local rental market dynamics. With a renter density of only 14.3%, it's important to note that the demand for rental properties, particularly those under the Section 8 program, might be limited. This could affect the ability to consistently lease properties at the FMR rate.
Furthermore, the Days on Market (DOM) figure being N/A suggests there may be insufficient data to accurately gauge how quickly properties are typically leased in this area. This lack of information makes it difficult to assess the vacancy risk, which can significantly impact the actual gross yield.
In conclusion, while the Section 8 scenario offers a higher gross yield at 5.13% compared to the market rent scenario at 3.02%, the low renter density and uncertain DOM data indicate that achieving this yield may be challenging. Landlords and investors should consider these factors carefully when deciding whether to participate in the Section 8 program for ZIP 05873.
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.