Location: Pittsburgh, PA | Metro: Pittsburgh, PA HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $980 |
| 1 Bedroom | $1,050 |
| 2 Bedrooms | $1,270 |
| 3 Bedrooms | $1,620 |
| 4 Bedrooms | $1,760 |
| 5 Bedrooms | $2,042 |
| 6 Bedrooms | $2,287 |
| 7 Bedrooms | $2,470 |
| 8 Bedrooms | $2,594 |
U.S. Census Bureau data (2024)
The analysis of Section 8 cap rates for ZIP code 15633 reveals some key insights into potential investment opportunities. The Fair Market Rent (FMR) for a 2-bedroom apartment in this area, as determined by HUD for fiscal year 2024, is set at $1120 per month. To annualize this figure, we multiply by 12, resulting in an annual rent of $13,440.
However, the median home value for ZIP 15633 is not available, and neither is the average market rent. This lack of data makes it challenging to provide a direct comparison between the Section 8 rental income and the typical market rental income. Nevertheless, we can still derive an implied gross yield based on the Section 8 FMR.
In the scenario where a landlord relies solely on Section 8 rental income, the implied gross yield would be calculated by dividing the annualized FMR by the median home value. Since the median home value is not provided, let's assume a hypothetical value for illustration purposes. If the median home value were $250,000, the gross yield would be approximately 5.38% ($13,440 / $250,000).
The absence of market rent data prevents us from calculating a precise gross yield for non-Section 8 rentals. However, given that the renter density is 0.0%, it suggests that there is little to no existing rental market in ZIP 15633. Additionally, the Days on Market (DOM) is also not available, which typically indicates how quickly properties are rented out. Without this information, it's difficult to assess the speed at which a property might be leased outside of the Section 8 program.
Considering these factors, the Section 8 rental scenario appears to be the more realistic option for landlords and small-portfolio investors looking to enter the ZIP 15633 market. The guaranteed income and stability offered by the Section 8 program can be particularly attractive in areas with low renter density and uncertain market conditions.
While the exact gross yield for market rents remains unknown, the certainty of receiving $1120 per month through Section 8 provides a solid foundation for investment calculations. Landlords should use this figure to estimate their potential returns and factor in other costs such as maintenance, vacancies, and management fees to determine the net operating income (NOI).
In conclusion, the Section 8 cap rate scenario offers a clearer path forward for investors in ZIP 15633, with a stable annual rent of $13,440. This scenario is more tangible due to the lack of alternative rental market data, making it a reliable starting point for financial planning.
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.