Location: Philadelphia-Camden-Wilmington, PA | Metro: Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,700 |
| 1 Bedroom | $1,840 |
| 2 Bedrooms | $2,200 |
| 3 Bedrooms | $2,620 |
| 4 Bedrooms | $2,890 |
| 5 Bedrooms | $3,352 |
| 6 Bedrooms | $3,754 |
| 7 Bedrooms | $4,054 |
| 8 Bedrooms | $4,257 |
U.S. Census Bureau data (2024)
The Section 8 cap rate scenario for ZIP 08080 (Sewell, NJ) can be analyzed using the Fair Market Rent (FMR) and the Zip Oracle Rent Index (ZORI) figures provided. For a two-bedroom property, the annualized FMR for FY 2024 is $2180 multiplied by 12 months, equating to $26,160. The ZORI market rent is $2,378 per month, which totals $28,536 annually.
To calculate the implied gross yield for both scenarios, we use the median home value of $436,932. With the FMR, the gross yield is approximately 6.0% ($26,160 / $436,932 * 100). In contrast, the gross yield based on the market rent is slightly higher at about 6.5% ($28,536 / $436,932 * 100).
Given the renter density of 13.0% and the 15-day days on market (DOM), the FMR scenario is more realistic for Section 8 properties. This is because the lower renter density suggests that there is a smaller pool of potential tenants, making it more challenging to find non-Section 8 renters willing to pay the higher market rent. Additionally, the 15-day DOM indicates that properties are moving quickly once they come onto the market, which supports the idea that Section 8 properties are often occupied promptly due to the stable demand from subsidized housing programs.
In conclusion, while the market rent provides a marginally better gross yield, the reality of the local rental market leans towards the FMR figure being more practical for landlords participating in the Section 8 program. The 6.0% gross yield derived from the FMR is a more reliable indicator for Sewell, NJ, considering the limited rental market and the swift turnover rates typical of Section 8 units.
Data Sources: FMR data from HUD (2027). 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.