Location: Cape May County, NJ | Metro: Cape May County, NJ HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,510 |
| 1 Bedroom | $1,520 |
| 2 Bedrooms | $1,860 |
| 3 Bedrooms | $2,440 |
| 4 Bedrooms | $2,440 |
| 5 Bedrooms | $2,830 |
| 6 Bedrooms | $3,170 |
| 7 Bedrooms | $3,424 |
| 8 Bedrooms | $3,595 |
The analysis for ZIP code 08250 in New Jersey provides insight into the potential returns for landlords and small-portfolio investors interested in Section 8 properties. The Fair Market Rent (FMR) for a two-bedroom apartment in fiscal year 2024 is set at $1570 per month. To calculate the implied gross yield, we must first annualize this figure. Multiplying the monthly FMR by 12 gives us an annual rental income of $18,840.
Unfortunately, the data does not provide a specific median home value for ZIP 08250, nor does it offer details on the market rent or the percentage of renters in the area. Additionally, the Days on Market (DOM) for properties in this ZIP code is also not available. These missing pieces make it challenging to derive a precise cap rate or gross yield based on market rent conditions.
However, using the FMR as a benchmark, we can still provide a general understanding of the investment dynamics. With the annualized FMR of $18,840, the implied gross yield would be calculated by dividing this amount by the median home value. Without a specific median home value, we cannot provide a concrete gross yield percentage. Nonetheless, it's clear that the gross yield based on FMR would be lower compared to what might be achievable with market rents if they were higher than the FMR.
In conclusion, while the exact cap rate cannot be determined due to the lack of specific data points such as median home value and market rent, the use of FMR as a basis suggests a conservative approach to estimating potential returns. Investors should consider these limitations and conduct further research to understand the local real estate market dynamics and determine a more accurate gross yield. Given the incomplete information, relying on FMR for two-bedroom units offers a realistic starting point for evaluating the investment potential in ZIP 08250.
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.