Location: Monmouth-Ocean, NJ | Metro: Monmouth-Ocean, 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 | $1,920 |
| 1 Bedroom | $2,120 |
| 2 Bedrooms | $2,620 |
| 3 Bedrooms | $3,360 |
| 4 Bedrooms | $3,720 |
| 5 Bedrooms | $4,315 |
| 6 Bedrooms | $4,833 |
| 7 Bedrooms | $5,220 |
| 8 Bedrooms | $5,481 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,120 | $341,069 | 0.62% | D |
| 2BR | $2,620 | $524,564 | 0.5% | F |
| 3BR | $3,360 | $796,693 | 0.42% | F |
| 4BR | $3,720 | $1,015,992 | 0.37% | F |
| 5BR | $4,315 | $1,242,668 | 0.35% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 07701 (Red Bank, NJ) provides a clear picture of the potential returns for landlords and small-portfolio investors. Using the Fair Market Rent (FMR) for a 2-bedroom apartment at $2190 per month for FY 2024, the annualized rental income would be $26,280. Against the median home value of $691,276, this implies a gross yield of approximately 3.8%. This calculation is based on the assumption that the property is valued at the median home price and rented out at the FMR rate.
In contrast, using the Zillow Observed Rental Index (ZORI) for a 2-bedroom apartment at $3,043 per month, the annualized rental income would be $36,516. This translates to a gross yield of about 5.3% when compared to the median home value. The higher gross yield in this scenario reflects the premium that tenants might pay above the FMR rate, indicating a potentially better return on investment for landlords who can secure market rents.
Given the renter density of 34.8%, it is evident that a significant portion of the population in Red Bank, NJ, is looking for rental properties. However, the 21-day Days on Market (DOM) suggests that there is strong competition among rental listings, which could make it challenging to consistently achieve market rents. Therefore, while the gross yield of 5.3% based on market rents is attractive, the more realistic scenario for most landlords is likely to be closer to the 3.8% gross yield based on the FMR rate.
Investors should consider these figures carefully, especially when evaluating the long-term viability of Section 8 properties in this area. While the market rent scenario offers a more lucrative gross yield, the difficulty in securing and maintaining those rates due to the competitive rental market makes the FMR-based gross yield a more reliable benchmark for investment decisions.
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.