Location: Bedford County, PA | Metro: Bedford County, PA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $850 |
| 1 Bedroom | $900 |
| 2 Bedrooms | $1,170 |
| 3 Bedrooms | $1,480 |
| 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 the Section 8 cap rate for ZIP code 16695 provides valuable insights into investment opportunities for landlords and small-portfolio investors. Using the Federal Market Rent (FMR) for a two-bedroom apartment at $1,130 annually, we can calculate the implied gross yield for properties in this area. The median home value in ZIP 16695 is $214,575.
To determine the gross yield based on the FMR, we first annualize the $1,130 figure, which gives us $13,560 per year. Dividing this by the median home value ($214,575) yields an implied gross yield of approximately 6.3%. This calculation assumes that the property is rented out at the FMR rate, which is set by HUD and reflects the maximum rental subsidy for eligible families.
In contrast, using the market rent figure of $880 per month, which comes from the Census ACS data, the annualized rent would be $10,560. When divided by the median home value, this results in an implied gross yield of about 4.9%. This scenario reflects the typical market conditions and the rents that most tenants might pay outside of the Section 8 program.
The 17.6% renter density suggests that a significant portion of the population in ZIP 16695 does not own homes and relies on rental housing. However, the N/A-day Days on Market (DOM) indicates that there is limited data available regarding how quickly rental units are occupied, which could affect the reliability of the market rent figure.
Given the higher implied gross yield of 6.3% from the FMR compared to the 4.9% from the market rent, the Section 8 scenario appears more favorable for generating income. However, the decision should also consider the administrative burden and potential risks associated with participating in the Section 8 program. For instance, landlords must adhere to HUD regulations, and there is a risk of delayed payments if the program faces funding issues. Therefore, while the FMR-based gross yield is higher, the market rent scenario remains a realistic benchmark for assessing the overall profitability of rental investments in ZIP 16695.
In summary, the Section 8 program offers a higher gross yield, making it an attractive option for landlords looking to maximize returns. However, the actual market conditions, reflected by the lower gross yield of 4.9%, should also be taken into account when making investment decisions.
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.