Location: Jefferson County, PA | Metro: Elk County, PA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $740 |
| 1 Bedroom | $860 |
| 2 Bedrooms | $1,030 |
| 3 Bedrooms | $1,330 |
| 4 Bedrooms | $1,490 |
| 5 Bedrooms | $1,728 |
| 6 Bedrooms | $1,935 |
| 7 Bedrooms | $2,090 |
| 8 Bedrooms | $2,195 |
U.S. Census Bureau data (2024)
The analysis for ZIP code 15828 reveals a complex picture when it comes to Section 8 cap rates. The Fair Market Rent (FMR) for a 2-bedroom apartment, as set by HUD for fiscal year 2026, is $980 per month. This figure is based on metro-level data, which is the most granular level available.
To calculate the implied gross yield, we need to consider the annualized rental income. At $980 per month, the annual rental income would be $11,760. Without a specific median home value for the area, it's challenging to provide an exact cap rate. However, if we assume a median home value that is typical for suburban areas in the United States, say around $250,000, the implied gross yield would be approximately 4.7%. This calculation is based on the formula: Gross Yield = Annual Rental Income / Property Value.
In a scenario where the market rent is not available, we can only rely on the FMR for our calculations. Given that the FMR is set by HUD to ensure affordability and reflects the average rent paid by moderate-income families, it serves as a reliable benchmark for the minimum rent a landlord can expect under a Section 8 voucher program.
The 21.8% renter density in ZIP 15828 suggests a relatively low proportion of renters compared to homeowners, which could indicate a less competitive rental market. This lower competition might mean that landlords can expect to have fewer vacancies, leading to more stable income streams. However, the lack of data on the median home value and the days on market (DOM) makes it difficult to determine the exact gross yield and the competitiveness of the rental market.
In conclusion, the implied gross yield based on the FMR is 4.7%, assuming a property value of $250,000. This figure provides a baseline for potential returns, but it is important to note that without specific market rent data and median home values, this calculation remains speculative. Landlords and small-portfolio investors should conduct further research into local market conditions and property values to refine their investment strategies.
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.