Location: Pittsburgh, PA | Metro: Pittsburgh, PA HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,090 |
| 1 Bedroom | $1,160 |
| 2 Bedrooms | $1,410 |
| 3 Bedrooms | $1,800 |
| 4 Bedrooms | $1,950 |
| 5 Bedrooms | $2,262 |
| 6 Bedrooms | $2,533 |
| 7 Bedrooms | $2,736 |
| 8 Bedrooms | $2,873 |
U.S. Census Bureau data (2024)
The analysis of Section 8 cap rates for ZIP code 15379 reveals some interesting insights for landlords and small-portfolio investors. To begin, let's look at the annualized Fair Market Rent (FMR) for a two-bedroom apartment, which is set at $1140 for fiscal year 2024. This figure is crucial for understanding the potential income from a property under the Section 8 program.
Given that the median home value in ZIP 15379 is not available, we can only estimate the gross yield based on the FMR. If we assume a median home value similar to nearby areas, we can infer a general range. However, the lack of specific market rent data makes it challenging to provide an exact comparison. For the sake of illustration, let's consider a hypothetical median home value of $200,000, which is a reasonable estimate for the region.
The implied gross yield from the Section 8 program would be approximately 6.84%, calculated as follows: $1140 * 12 months / $200,000 = 0.0684 or 6.84%. This yield reflects the annual rental income relative to the property's value, assuming the $200,000 median home value.
In contrast, the market rent for ZIP 15379 is not available, making it difficult to determine the gross yield in a competitive rental market. However, if the market rent were higher than the FMR, the gross yield would likely exceed 6.84%, providing a more favorable return on investment for landlords.
Considering the 0.0% renter density and the non-available days on market (DOM), it is evident that the actual market conditions may not support a high occupancy rate for rental properties, especially those exclusively participating in the Section 8 program. The low renter density suggests a limited pool of tenants, while the non-available DOM indicates either a very stable market or a lack of recent sales data, making it hard to gauge the current demand for rentals.
Based on these factors, the Section 8 cap rate scenario with an annualized FMR of $1140 is more realistic. Landlords should prepare for potentially lower occupancy rates and longer periods to find suitable tenants. While the gross yield from the Section 8 program is calculable, the absence of market rent data means that direct comparisons cannot be made with confidence.
To conclude, the Section 8 program offers a stable, albeit lower, gross yield compared to what might be achievable in a robust rental market. The decision to participate in Section 8 should be based on the landlord's risk tolerance and long-term investment strategy, considering the stability and predictability of rental income versus the potential for higher yields in a more active rental environment.
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.