Location: Newark, NJ | Metro: Bergen-Passaic, NJ HUD Metro FMR Area
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,940 |
| 1 Bedroom | $2,200 |
| 2 Bedrooms | $2,650 |
| 3 Bedrooms | $3,300 |
| 4 Bedrooms | $3,780 |
| 5 Bedrooms | $4,385 |
| 6 Bedrooms | $4,911 |
| 7 Bedrooms | $5,304 |
| 8 Bedrooms | $5,569 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,650 | $567,278 | 0.47% | F |
| 3BR | $3,300 | $779,399 | 0.42% | F |
| 4BR | $3,780 | $986,223 | 0.38% | F |
| 5BR | $4,385 | $1,342,753 | 0.33% | F |
U.S. Census Bureau data (2024)
ZIP code 07006 is located in West Caldwell, New Jersey, a suburban area known for its affluent and stable community. The neighborhood is characterized by a relatively low percentage of renters at 28.1%, indicating a strong preference for homeownership among residents. With a total population of 26,654, the area boasts a median household income of $149,102, placing it well above the national average. The median home value stands at $838,246, reflecting the high-end real estate market in this part of Essex County.
The rental economics in ZIP 07006 present an interesting opportunity for investors. The Fair Market Rent (FMR) for the zip code for fiscal year 2024 is set at $2,350, which is notably lower than the Zillow Observed Rental Index (ZORI) of $2,701. This suggests that there is a discrepancy between the government-set rates and the actual market rates, potentially offering a margin of profit for those willing to navigate the complexities of the Section 8 program.
Given these conditions, ZIP 07006 might be more suited for a hands-on value-add buyer rather than a hands-off voucher operator. The higher market rents indicate a demand for quality rentals that could be met by improving existing properties or developing new ones. Investors who can manage the properties effectively, ensuring compliance with Section 8 requirements while also providing amenities and services that appeal to the local demographic, will likely find success. Conversely, a purely hands-off approach might result in lower occupancy rates or difficulties in finding tenants willing to accept the lower FMR.
To conclude, the economic profile of West Caldwell's ZIP 07006 presents a challenging yet rewarding landscape for real estate investors interested in the Section 8 program. A strategic, hands-on investment strategy focused on enhancing property values and meeting the needs of both government programs and market demands would be most effective here.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.