Location: Newark, NJ | Metro: Newark, NJ HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,690 |
| 1 Bedroom | $1,910 |
| 2 Bedrooms | $2,300 |
| 3 Bedrooms | $2,870 |
| 4 Bedrooms | $3,280 |
| 5 Bedrooms | $3,805 |
| 6 Bedrooms | $4,262 |
| 7 Bedrooms | $4,603 |
| 8 Bedrooms | $4,833 |
The analysis of the Section 8 cap rate for ZIP code 07902 in New Jersey requires an understanding of the Fair Market Rent (FMR) and the median home value, as well as the rental market dynamics.
The annualized Fair Market Rent for a two-bedroom apartment in ZIP 07902 for fiscal year 2024 is set at $1920. This figure represents the maximum amount that a landlord can charge for a Section 8 voucher tenant in this area. However, the market rent for a similar unit is not available, indicating a gap in current data for direct comparison.
To calculate the implied gross yield, we would typically divide the annual rent by the median home value. Unfortunately, the median home value for ZIP 07902 is also not available, which makes it challenging to provide a precise gross yield figure. Without this information, we cannot determine the exact gross yield for the Section 8 scenario or compare it to the market rent scenario.
The lack of data on renter density and days on market (DOM) further complicates the analysis. These metrics would help us understand how quickly properties are rented and the proportion of renters in the area, which are crucial for gauging the attractiveness of Section 8 versus market rentals.
Given the available data, it is clear that the Section 8 rent of $1920 per year provides a guaranteed income stream, though the overall gross yield cannot be definitively stated without the median home value. In the absence of market rent data, the reliability of Section 8 vouchers as a consistent source of income stands out, especially in areas where the rental market is volatile or uncertain.
Landlords and small-portfolio investors should consider the stability provided by Section 8 vouchers, even if the gross yield calculation is incomplete. The predictability of government-backed rents can outweigh the risks associated with market fluctuations, making it a viable option despite the lack of detailed local market data.
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.