Section 8 Fair Market Rent (FMR) for ZIP 14730 - 2027

FY 2027 Fair Market Rent Rates

The analysis for ZIP code 14730 in Unknown, NY, reveals some key insights into the potential returns for landlords and small-portfolio investors considering Section 8 properties.

Based on the Fair Market Rent (FMR) data provided, the annualized rental income for a two-bedroom property under Section 8 is $12,120 ($1,010 per month).

However, the median home value in ZIP 14730 is not available, making it challenging to calculate an exact cap rate. A cap rate is the ratio of net operating income produced by an asset to its capital cost or current market value. Without the median home value, we cannot compute the precise cap rate, but we can infer the gross yield.

The gross yield for a Section 8 property in this scenario would be calculated by dividing the annual rental income by the property's purchase price. For instance, if a property were purchased at the median home value (which is currently unavailable), the gross yield would be the annual rental income divided by that purchase price. If we hypothetically assume a median home value, say $200,000, the gross yield would be 6.06% ($12,120 / $200,000).

Without a specific market rent figure, we cannot compare the gross yields directly. However, it is important to note that market rents typically exceed FMRs, suggesting a potentially higher gross yield for non-Section 8 properties. This implies that the gross yield for a market-rent property could be significantly higher, depending on the actual market rates.

The lack of specific data on median home value, renter density, and days on market (DOM) makes it difficult to provide a comprehensive analysis. However, the availability of FMR data allows us to focus on the guaranteed income aspect of Section 8 properties. The stability and predictability of Section 8 rents, despite being lower than market rents, offer a reliable source of income.

In conclusion, while the exact cap rate cannot be determined due to missing data, the gross yield for a Section 8 property in ZIP 14730 can be inferred to be around 6.06%, assuming a hypothetical median home value of $200,000. This figure provides a baseline for comparison against market rents, which would likely offer a higher gross yield but with less stability and predictability.

Data Sources: FMR data from HUD (2027).

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.