Location: Newark, NJ | Metro: Newark, 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 | $1,640 |
| 1 Bedroom | $1,850 |
| 2 Bedrooms | $2,230 |
| 3 Bedrooms | $2,780 |
| 4 Bedrooms | $3,180 |
| 5 Bedrooms | $3,689 |
| 6 Bedrooms | $4,132 |
| 7 Bedrooms | $4,463 |
| 8 Bedrooms | $4,686 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,230 | $454,215 | 0.49% | F |
| 3BR | $2,780 | $641,971 | 0.43% | F |
| 4BR | $3,180 | $868,907 | 0.37% | F |
| 5BR | $3,689 | $1,253,296 | 0.29% | F |
U.S. Census Bureau data (2024)
The rent math in ZIP 07405, encompassing Kinnelon and part of the Newark, NJ HUD Metro FMR Area, does not align favorably for landlords. The Fair Market Rent (FMR) set at $1990 for the fiscal year 2024 contrasts sharply with the actual market rent, which stands at $1,676 according to the Census ACS. This discrepancy suggests that landlords may struggle to cover costs if they rely solely on the FMR benchmark.
Acquisition in this area remains challenging due to the high median home value of $674,306. The lack of data on days on market (DOM) and the negligible 0.1% price-cut share indicate that homes are selling quickly at or near their listed prices, making it difficult for new investors to enter the market without significant capital. Existing landlords can expect competition from buyers willing to pay premium prices.
Tenant demand in ZIP 07405 is moderate but present. With a total population of 17,983, nearly 19.4% of residents are renters. This translates to approximately 3,487 potential tenants, a number sufficient to sustain rental properties but not enough to drive up rents significantly beyond the current market rate.
In summary, while there is a steady pool of tenants in ZIP 07405, the rent math does not currently support profitability based on the FMR. Acquisition costs are prohibitive, and the market shows little flexibility for negotiation. Small-portfolio investors should proceed cautiously, ensuring thorough financial planning to account for these challenges.
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.