Location: Pittsburgh, PA | Metro: Pittsburgh, PA HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $970 |
| 1 Bedroom | $1,040 |
| 2 Bedrooms | $1,260 |
| 3 Bedrooms | $1,610 |
| 4 Bedrooms | $1,740 |
| 5 Bedrooms | $2,018 |
| 6 Bedrooms | $2,260 |
| 7 Bedrooms | $2,441 |
| 8 Bedrooms | $2,563 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 15038 reveals two distinct rental environments: the federally mandated Fair Market Rent (FMR) and the potential market rent. For the Section 8 scenario, the annualized 2-bedroom FMR is set at $1040 for fiscal year 2024. Given the median home value of $95,809, this translates into an implied gross yield of approximately 12.9%. This calculation assumes that the property can be rented out for the entirety of the year at the FMR rate, without accounting for vacancy periods or maintenance costs.
In contrast, the market rent scenario presents a less defined picture due to the lack of specific market rent data for ZIP 15038. However, assuming the market rent could potentially exceed the FMR, it would result in a higher gross yield. The exact figure cannot be determined without specific market rent data, but it's important to note that any increase above the $1040 FMR would improve the gross yield proportionally.
The 58.4% renter density suggests a robust demand for rental properties in ZIP 15038. While this supports the viability of rental investments, the absence of data on days-on-market (DOM) makes it challenging to predict how quickly properties might be leased, especially under market conditions. The FMR scenario provides a stable and predictable income stream, which is particularly appealing given the high renter density and the federal backing that ensures consistent payment. However, the potential for higher returns through market rents remains an attractive option for investors willing to navigate the complexities of local rental markets.
The FMR-based gross yield of 12.9% offers a solid baseline for investment decisions, especially for those prioritizing stability over the pursuit of higher yields. For investors looking beyond the Section 8 program, the market rent scenario could offer superior returns, contingent upon securing higher rental rates. Nonetheless, the FMR scenario remains a reliable benchmark, reflecting the guaranteed income stream and the substantial demand for rentals 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.