Location: Watertown-Fort Drum, NY | Metro: Watertown-Fort Drum, NY MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,250 |
| 1 Bedroom | $1,380 |
| 2 Bedrooms | $1,800 |
| 3 Bedrooms | $2,470 |
| 4 Bedrooms | $2,940 |
| 5 Bedrooms | $3,410 |
| 6 Bedrooms | $3,819 |
| 7 Bedrooms | $4,125 |
| 8 Bedrooms | $4,331 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 13603 provides a detailed look at potential rental income versus the Fair Market Rent (FMR) and market rent rates. For a two-bedroom property, the annualized FMR set by HUD for FY 2024 is $1750 per month, while the Census ACS reports a market rent of $1627 per month.
To derive the cap rate, we must first calculate the gross yield based on these figures. The FMR scenario suggests a higher monthly rental income, which translates into an annual rental income of $21,000. Given that the median home value is not available, we cannot provide a precise cap rate calculation. However, if we assume a median home value, the gross yield can be derived by dividing the annual rental income by the property value. For instance, if the median home value were hypothetically $250,000, the gross yield would be 8.4% ($21,000 / $250,000).
In contrast, using the market rent figure of $1627 per month, the annual rental income drops to $19,524. Assuming the same hypothetical median home value of $250,000, the gross yield under the market rent scenario would be 7.8% ($19,524 / $250,000).
The implied gross yield under the FMR scenario is thus higher, indicating a potentially better return on investment. However, the reality of the situation is influenced by several factors, including the high renter density of 96.0%. This suggests a robust demand for rentals, making it likely that properties in ZIP 13603 can command closer to the FMR rate. The lack of data on days on market (DOM) makes it challenging to predict how quickly a property might lease at either rate, but the strong rental demand implies a shorter DOM.
Given the data, the FMR-based gross yield appears more realistic for landlords and small-portfolio investors considering Section 8 participation in ZIP 13603. It reflects a scenario where the higher rental income from Section 8 vouchers offsets the lower vacancy rate, providing a steady stream of income that aligns with the high demand for rental properties in the 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.