Location: Rochester, 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 | $1,510 |
| 1 Bedroom | $1,700 |
| 2 Bedrooms | $2,130 |
| 3 Bedrooms | $2,560 |
| 4 Bedrooms | $2,810 |
| 5 Bedrooms | $3,260 |
| 6 Bedrooms | $3,651 |
| 7 Bedrooms | $3,943 |
| 8 Bedrooms | $4,140 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,130 | $426,313 | 0.5% | F |
| 3BR | $2,560 | $441,209 | 0.58% | F |
| 4BR | $2,810 | $575,371 | 0.49% | F |
| 5BR | $3,260 | $727,274 | 0.45% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 14534, located in Pittsford, NY, provides a clear picture of the potential returns for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a two-bedroom property in this area for fiscal year 2024 is set at $1960 per month, while the Zillow Observed Rent Index (ZORI) indicates a market rent of $2,242 per month. Using these figures against the median home value of $506,465, we can derive the implied gross yields.
First, let's calculate the gross yield based on the FMR. With an annualized rent of $1960 multiplied by 12 months, the total annual rent comes to $23,520. Dividing this by the median home value gives us an implied gross yield of approximately 4.6%. Next, considering the ZORI market rent, the annualized figure would be $2,242 times 12, totaling $26,904 annually. This results in an implied gross yield of roughly 5.3% when compared to the median home value.
The higher gross yield based on the market rent suggests better financial performance for landlords. However, the reality of the rental market must also be considered. In ZIP 14534, only 9.6% of the population are renters, indicating a relatively low demand for rental properties. Additionally, the days on market (DOM) is 8 days, which implies that properties are not staying vacant for long periods once listed. This quick turnover can be advantageous for landlords, as it minimizes vacancy rates and ensures a steady stream of income.
Given the low renter density, it is crucial for landlords to understand that relying solely on Section 8 tenants might limit the pool of potential renters. Therefore, the market rent scenario appears more realistic, as it accounts for a broader range of potential tenants beyond just those receiving housing assistance. The 5.3% gross yield derived from the market rent is a more accurate representation of what landlords can expect in terms of return on investment in this ZIP code.
In conclusion, while the Section 8 FMR provides an annual gross yield of about 4.6%, the market rent scenario offers a slightly better gross yield of around 5.3%. Considering the low renter density and quick DOM, landlords should aim for the higher market rent to maximize their returns and ensure a stable occupancy rate.
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.