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 | $1,760 |
| 1 Bedroom | $1,950 |
| 2 Bedrooms | $2,410 |
| 3 Bedrooms | $3,090 |
| 4 Bedrooms | $3,420 |
| 5 Bedrooms | $3,967 |
| 6 Bedrooms | $4,443 |
| 7 Bedrooms | $4,798 |
| 8 Bedrooms | $5,038 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,950 | $412,158 | 0.47% | F |
| 2BR | $2,410 | $621,129 | 0.39% | F |
| 3BR | $3,090 | $792,722 | 0.39% | F |
| 4BR | $3,420 | $1,093,481 | 0.31% | F |
| 5BR | $3,967 | $1,839,858 | 0.22% | F |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $2,110 for ZIP code 08742 (Point Pleasant, NJ) in fiscal year 2024 will sufficiently cover the mortgage payments on a property valued at $845,708. The FMR is designed to reflect the average rent for a modest home in the area and does not guarantee that it will cover all costs associated with owning a home, including mortgage payments, property taxes, insurance, and maintenance. However, the FMR can be used as a baseline to understand what tenants might reasonably pay, ensuring that rental income is sufficient to meet the basic requirements of occupancy.
The percentage of renters in Point Pleasant is 18.9%, which could raise concerns over the level of demand for rental properties. While this figure is relatively low compared to some urban areas, it indicates that nearly one in five residents are renters, suggesting a viable market for landlords. This percentage also reflects the broader trend of homeownership in the region, which is higher than the national average. Despite the lower rental rate, the strong local economy and desirable location can attract a steady stream of tenants seeking short-term or seasonal housing.
Another concern is whether voucher payments will keep pace with the market rents, which stand at $3,706. The Housing Choice Voucher program aims to provide assistance to low-income families, but the payment standards vary by zip code and do not always align with market rents. In ZIP 08742, voucher holders may find it challenging to afford market-rate units given the gap between the FMR and market rents. Landlords should consider the possibility of accepting vouchers for a portion of their portfolio, particularly for units priced closer to the FMR, to ensure a stable tenant base.
In conclusion, while the FMR of $2,110 may not cover the entire mortgage on an expensive property, it does provide a reliable estimate for rental income. The 18.9% rental rate suggests a smaller but still present demand for rentals, especially considering the local economic conditions. Lastly, the discrepancy between market rents and voucher payment standards means landlords must carefully balance their pricing strategy to accommodate both market-rate and voucher-assisted tenants.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.