Location: Waterbury-Shelton, CT | Metro: Waterbury-Shelton, CT MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,260 |
| 1 Bedroom | $1,380 |
| 2 Bedrooms | $1,760 |
| 3 Bedrooms | $2,200 |
| 4 Bedrooms | $2,620 |
| 5 Bedrooms | $3,039 |
| 6 Bedrooms | $3,404 |
| 7 Bedrooms | $3,676 |
| 8 Bedrooms | $3,860 |
The analysis for ZIP code 06722 in Connecticut focuses on deriving the Section 8 cap rate and comparing it with the potential market rent scenario. For the Section 8 scenario, we annualize the Fair Market Rent (FMR) for a two-bedroom unit at $1600 per month, which amounts to an annual rent of $19,200. Given that the median home value for this area is not available, we cannot calculate a precise cap rate. However, we can infer the gross yield based on the annualized rent.
In the absence of market rent data, we cannot provide a direct comparison between the Section 8 rent and the market rent for ZIP 06722. Nonetheless, the gross yield derived from the Section 8 rental income would be significantly lower than what might be expected in a typical market scenario, where rents are usually higher. This implies that for properties participating in the Section 8 program, the gross yield will be less attractive compared to non-subsidized rentals.
The lack of specific data on renter density and days on market (DOM) makes it challenging to determine which scenario is more realistic. However, generally speaking, areas with high renter density and shorter DOM tend to favor market rents over subsidized rents. Without these specifics, we cannot definitively state which scenario is more likely to occur in ZIP 06722.
To summarize, the annualized Section 8 rent for a two-bedroom unit in ZIP 06722 is $19,200, leading to a lower gross yield when compared to potential market rents. The exact cap rate cannot be calculated due to missing median home value data, but the implication is clear: market rents typically offer a better gross yield for landlords and small-portfolio investors. The decision to participate in Section 8 should consider the stability of income versus the potentially higher yields from market rents.
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.