Location: Kingston, NY | Metro: Kingston, NY MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,390 |
| 1 Bedroom | $1,530 |
| 2 Bedrooms | $2,000 |
| 3 Bedrooms | $2,430 |
| 4 Bedrooms | $2,630 |
| 5 Bedrooms | $3,051 |
| 6 Bedrooms | $3,417 |
| 7 Bedrooms | $3,690 |
| 8 Bedrooms | $3,875 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 12487, Ulster Park, NY, reveals a stark contrast between government-subsidized rental income and market-driven rental rates. Using the Fair Market Rent (FMR) for a 2-bedroom apartment set at $1800 annually by the HUD for FY 2024, the implied gross yield for a property valued at $429,415 would be approximately 4.2%. This is calculated by taking the annual rental income ($1800 * 12 months = $21,600) and dividing it by the median home value ($429,415).
In contrast, using the market rent figure of $1,405 per month from the Census ACS, the implied gross yield drops significantly to about 3.9%. This is derived by multiplying the monthly market rent ($1,405) by 12 months to get an annual rental income of $16,860, and then dividing that by the median home value ($429,415).
The lower gross yield based on market rent suggests that properties in ZIP 12487 might underperform compared to the Section 8 program when considering potential rental income. However, the reality is more nuanced due to the 21.3% renter density and the unavailability of days-on-market (DOM) data. With such a low percentage of renters, landlords may find it challenging to attract tenants willing to pay market rates, especially in a location where vacancy rates could be high.
The absence of DOM data means we cannot assess how quickly properties are rented out, which can impact the overall profitability. In a scenario where finding market-rate tenants is difficult, the stability and guaranteed income from the Section 8 program become more attractive. The 4.2% gross yield from Section 8, while slightly higher, also comes with the benefits of consistent occupancy and fewer vacancies, making it a more realistic option for landlords and small-portfolio investors in this area.
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.