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 | $1,790 |
| 1 Bedroom | $2,000 |
| 2 Bedrooms | $2,300 |
| 3 Bedrooms | $2,790 |
| 4 Bedrooms | $3,520 |
| 5 Bedrooms | $4,083 |
| 6 Bedrooms | $4,573 |
| 7 Bedrooms | $4,939 |
| 8 Bedrooms | $5,186 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,000 | $340,619 | 0.59% | F |
| 2BR | $2,300 | $567,215 | 0.41% | F |
| 3BR | $2,790 | $653,470 | 0.43% | F |
| 4BR | $3,520 | $736,778 | 0.48% | F |
| 5BR | $4,083 | $858,578 | 0.48% | F |
U.S. Census Bureau data (2024)
The market analysis for Section 8 investors targeting ZIP code 07424, which encompasses Woodland Park, NJ, within the Passaic County and Newark, NJ HUD Metro FMR Area, reveals a competitive rental environment. The HUD Fair Market Rent (FMR) for the area is set at $1860 per month for the fiscal year 2024. In contrast, the market rent, as measured by ZORI (Zillow Observed Rent Index), stands at $2,488 per month. This indicates that landlords accepting Section 8 vouchers will experience negative cash flow on standard units, as the voucher amount is significantly lower than the market rate.
To determine the viability of Section 8 investments, it's crucial to assess the rent-to-price ratio. With a median home value of $634,242, the rent-to-price ratio in ZIP 07424 is approximately 0.4%. This ratio suggests that the area's rental income does not adequately cover the cost of ownership when compared to the purchase price of homes. However, landlords can still achieve positive cash flow by focusing on premium units that command higher rents or by strategically negotiating rents within the voucher limits.
The rental market in ZIP 07424 is characterized by a relatively quick time to lease, with a median Days on Market (DOM) of 22 days. Additionally, the low price-cut share of 0.1% implies that rental properties are generally priced correctly and are attractive to tenants without needing significant adjustments. These factors contribute to a stable rental market, where landlords can expect consistent demand for their properties.
The strong investor angle in this market is stability. Despite the negative cash flow on standard units, the robust demand for rentals and the quick leasing times indicate that landlords can maintain steady occupancy rates. This stability provides a reliable source of income and minimizes the risk of vacancies, making it an attractive investment for those prioritizing consistent returns over short-term cash flow gains.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.