Location: Watertown-Fort Drum, NY | Metro: Watertown-Fort Drum, NY MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $920 |
| 1 Bedroom | $1,010 |
| 2 Bedrooms | $1,320 |
| 3 Bedrooms | $1,810 |
| 4 Bedrooms | $2,160 |
| 5 Bedrooms | $2,506 |
| 6 Bedrooms | $2,807 |
| 7 Bedrooms | $3,032 |
| 8 Bedrooms | $3,184 |
U.S. Census Bureau data (2024)
The median home value in ZIP code 13632 is approximately $170,000 based on recent housing market data. For context, the annualized Fair Market Rent (FMR) for a two-bedroom apartment in this area for fiscal year 2024 is $1360. To derive the gross yield, we first calculate the annual rental income at $1360 multiplied by 12 months, resulting in $16,320 annually.
Using the median home value of $170,000, the implied gross yield for a Section 8 property would be roughly 9.6% ($16,320 / $170,000 * 100%). However, it's important to note that this calculation assumes the median home value accurately reflects the purchase price of a typical Section 8 property, which may not always be the case due to various factors such as property condition and location within the ZIP code.
In contrast, the market rent for a two-bedroom apartment in ZIP 13632 is currently not available. This absence of market rent data makes it difficult to provide a precise comparison with the Section 8 scenario. However, if market rents were higher, the gross yield would naturally increase, making traditional rental investments more attractive relative to Section 8 properties.
Given the 8.3% renter density in ZIP 13632, the likelihood of finding tenants who qualify for Section 8 assistance may be relatively low. Additionally, the lack of data on days on market (DOM) suggests there might be challenges in assessing how quickly a property could be rented out under either scenario. Therefore, while the Section 8 gross yield of 9.6% is calculable, the market rent scenario, when known, could present a more competitive and potentially higher gross yield, assuming a robust rental market.
To conclude, the Section 8 cap-rate scenario for ZIP 13632 implies a gross yield of approximately 9.6%. This figure should be considered alongside the potential difficulties in securing qualified tenants and the unknown performance metrics such as DOM. Investors should compare this with the gross yields from market rent scenarios once those figures become available, to make informed decisions.
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.