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 | $1,110 |
| 1 Bedroom | $1,260 |
| 2 Bedrooms | $1,570 |
| 3 Bedrooms | $1,890 |
| 4 Bedrooms | $2,070 |
| 5 Bedrooms | $2,401 |
| 6 Bedrooms | $2,689 |
| 7 Bedrooms | $2,904 |
| 8 Bedrooms | $3,049 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,260 | $181,630 | 0.69% | D |
| 2BR | $1,570 | $219,763 | 0.71% | D |
| 3BR | $1,890 | $283,424 | 0.67% | D |
| 4BR | $2,070 | $313,148 | 0.66% | D |
| 5BR | $2,401 | $397,679 | 0.6% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 14620 in Rochester, NY, provides valuable insights into investment potential. For a two-bedroom property, the Fair Market Rent (FMR) set by HUD for FY 2024 is $1,370 per month. Multiplying this by 12 yields an annualized rental income of $16,440. The Zillow Observed Rent Index (ZORI), which reflects market rents, stands at $1,718 monthly. This translates to an annualized rental income of $20,616.
To calculate the implied gross yield, we divide the annual rental income by the median home value of $272,868. Using the FMR figure, the implied gross yield is approximately 6%. In contrast, applying the ZORI figure results in a gross yield of about 7.5%. These calculations offer a straightforward comparison between the guaranteed Section 8 rent and the prevailing market rates.
Given the 70.8% renter density in ZIP 14620, it is evident that there is a strong demand for rental properties. However, the N/A-day Days on Market (DOM) indicates incomplete data, which could be due to rapid turnover or other factors affecting the local real estate market's liquidity.
Considering the high renter density and the fact that Section 8 rents are fixed, the 6% gross yield derived from the FMR is more realistic for long-term investment planning. While the 7.5% gross yield based on market rents might seem attractive, it does not account for the potential risks associated with market fluctuations and tenant turnover. Section 8 provides stability through government-backed rent payments, making it a reliable option despite the lower yield.
Investors should weigh these figures carefully, understanding that while the higher market rent offers greater immediate returns, the security of Section 8 rents can provide a steady cash flow over time. The choice between these options depends largely on the investor's risk tolerance and long-term goals.
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.