Location: Cayuga County, NY | Metro: Rochester, 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 | $1,010 |
| 1 Bedroom | $1,140 |
| 2 Bedrooms | $1,420 |
| 3 Bedrooms | $1,710 |
| 4 Bedrooms | $1,880 |
| 5 Bedrooms | $2,181 |
| 6 Bedrooms | $2,443 |
| 7 Bedrooms | $2,638 |
| 8 Bedrooms | $2,770 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,420 | $215,220 | 0.66% | D |
| 3BR | $1,710 | $251,440 | 0.68% | D |
| 4BR | $1,880 | $302,522 | 0.62% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate picture for ZIP code 13156, located in Sterling, NY, can be derived using the Fair Market Rent (FMR) and market rent figures available for a two-bedroom apartment. For FY 2024, the annualized FMR for a 2BR in ZIP 13156 is $1070 per month, while the Census ACS reports a market rent of $582 per month. The median home value in this area is $220,553.
To calculate the implied gross yield for both scenarios, we first need to annualize the monthly rents. The annualized FMR would be $12,840 ($1070 x 12 months), and the market rent would be $7,008 ($582 x 12 months).
The implied gross yield based on the FMR would be approximately 5.8%, calculated by dividing the annual rent ($12,840) by the median home value ($220,553). On the other hand, the implied gross yield based on the market rent would be significantly lower at about 3.2%, calculated by dividing the annual market rent ($7,008) by the median home value ($220,553).
Given the 12.7% renter density in ZIP 13156, it's important to consider how likely it is that a property will remain occupied by a tenant paying the FMR versus a tenant paying the market rent. The N/A-day Days on Market (DOM) indicates that there is insufficient data to determine the average time it takes to rent out a property, which could suggest either a highly competitive market or a lack of rental activity.
Considering these factors, the gross yield based on the market rent seems more realistic. Landlords and small-portfolio investors should expect a gross yield closer to 3.2% rather than the higher 5.8% implied by the FMR. While the FMR represents a potential maximum income under the Section 8 program, the actual market conditions and renter density suggest that tenants may be more willing to pay the lower market rent, resulting in a lower gross yield.
In conclusion, for ZIP 13156, the gross yield calculation based on the market rent provides a more accurate representation of expected returns for landlords and small-portfolio investors. This scenario should be used as a basis for investment decisions in the area.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.