Location: Albany-Schenectady-Troy, NY | Metro: Albany-Schenectady-Troy, NY MSA
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 | $1,100 |
| 1 Bedroom | $1,280 |
| 2 Bedrooms | $1,540 |
| 3 Bedrooms | $1,840 |
| 4 Bedrooms | $2,030 |
| 5 Bedrooms | $2,355 |
| 6 Bedrooms | $2,638 |
| 7 Bedrooms | $2,849 |
| 8 Bedrooms | $2,991 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,540 | $206,122 | 0.75% | D |
| 3BR | $1,840 | $259,891 | 0.71% | D |
| 4BR | $2,030 | $286,500 | 0.71% | D |
| 5BR | $2,355 | $342,690 | 0.69% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 12122, Middleburgh, NY, reveals an interesting scenario when comparing Federal Market Rent (FMR) to market rent. For a two-bedroom unit, the annualized FMR as of FY 2024 is $1190 per month, while the Census ACS reported market rent stands at $1,106 per month.
To calculate the implied gross yield, we start with the FMR scenario. With an annual rent of $14,280 ($1190 x 12 months), the implied gross yield for a median home value of $234,358 would be approximately 6.1%. This calculation is derived from dividing the annual rent by the median home value. In contrast, using the market rent figure of $13,272 ($1,106 x 12 months), the implied gross yield drops to about 5.7%.
The difference between these two yields is significant for investors considering Section 8 properties. The 6.1% gross yield based on FMR is higher, suggesting a potentially better return on investment. However, the actual market conditions must also be considered. Given that only 18.6% of residents are renters, the demand for rental units, including those eligible for Section 8, might be lower compared to areas with higher renter densities. This factor could affect the stability and reliability of the FMR-based gross yield over time.
The N/A-day DOM (Days on Market) indicates that there is insufficient data to determine how quickly rental units are typically leased in this area. This lack of information makes it challenging to predict vacancy rates, which are crucial for determining the net operating income (NOI) and thus the true cap rate.
Despite the limitations posed by the low renter density and unknown DOM, the FMR-based gross yield of 6.1% provides a clearer benchmark for potential returns. It is important for investors to understand that while the higher yield from FMR is attractive, they should also consider the local rental market dynamics and the potential challenges of maintaining occupancy rates in an area where homeownership is predominant.
In summary, the gross yield comparison shows a slightly more favorable scenario under the FMR of 6.1%, but investors must weigh this against the local market realities of Middleburgh, NY.
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.