Section 8 Fair Market Rent (FMR) for ZIP 16720 - 2026

Market Analysis for ZIP 16720

Cities Covered: This ZIP code covers Austin.

FMR Rates (FY 2026):
Studio: $710 | 1BR: $740 | 2BR: $970 | 3BR: $1,220 | 4BR: $1,360

Median Property Prices & 1% Rule Analysis:

• 2BR Properties: Median price ~$93,000
  1% Rule: $970 ÷ $93,000 = 0.80% 👎 Below 1% Rule
• 3BR Properties: Median price ~$123,000
  1% Rule: $1,220 ÷ $123,000 = 0.79% 👎 Below 1% Rule

Market Overview: Austin’s 16720 ZIP code has a population of roughly 1,800. Families represent 40%, professionals 15%, students 5%, and service workers 40%. Vacancy stands at 4.5% and year‑over‑year rent growth ranges 2–3%. The local economy is driven by manufacturing, agriculture, and small businesses. The market is in a growth phase with a 0.8% population increase. Cash flow is moderate; the 1% rule is not met, but 5–7% gross yields are attainable on 2BR units at $970/month and 6–8% on 3BR units at $1,220/month. Appreciation trends 2–3% annually.

Investment Takeaway: Investment Takeaway: Purchase prices in the $85‑105k range produce gross yields of 5–7% on 2BR units at $970/month. 3BR units at $1,220/month offer 6–8% gross yield in the $110‑130k segment. Turnkey listings are preferable; light‑rehab can boost rents. Allocate 10–12% of purchase price annually for maintenance, taxes, and vacancy reserve. Focus on 2BR units, driven by families and service workers. 3BR units remain viable for larger households. Cash flow is steady, with modest appreciation (2–3%) providing upside.

Key Considerations: Key Considerations: Primarily cash‑flow market with modest appreciation. Tenant screening: credit ≥650, income ≥3× rent. Budget 8–10% maintenance, 5% vacancy, 1.5–2% taxes. Risks: tenant turnover, seasonal demand, aging buildings. Professional management at 8–10% of rent advisable for remote investors. Expected appreciation 2–3% annually.