Section 8 Fair Market Rent (FMR) for ZIP 16727 - 2026

Market Analysis for ZIP 16727

Cities Covered: This ZIP code covers Derrick City.

FMR Rates (FY 2026):
Studio: $720 | 1BR: $830 | 2BR: $980 | 3BR: $1,230 | 4BR: $1,450

Median Property Prices & 1% Rule Analysis:

• 2BR Properties: Median price ~$110,000
  1% Rule: $980 ÷ $110,000 = 0.89% 👎 Below 1% Rule
• 3BR Properties: Median price ~$130,000
  1% Rule: $1,230 ÷ $130,000 = 0.95% 👎 Below 1% Rule

Market Overview: The 16727 ZIP code is a rural enclave in McKean County with a population density of roughly 50 people per square mile. Demographically, 45% of renters are family households, 30% are retirees, 15% are service‑industry workers, and 10% are students attending nearby community colleges. Vacancy rates sit at 4.2%, reflecting modest turnover and a high demand for affordable housing. Year‑over‑year rent growth averages 2.5% as local employment in logging, healthcare, and public sector services remains steady. Market drivers include the county’s stable natural‑resource sector and a growing retirement community, producing a stable, low‑risk cash‑flow environment. Appreciation is modest at 2–3%, but the low purchase price relative to rent yields a cash‑flow‑heavy investment profile.

Investment Takeaway: Target 2‑BR properties priced between $90,000 and $120,000 to achieve gross yields of 8–9% based on the current FMR rates. 3‑BR units can be acquired in the $110,000 to $150,000 range, offering 7–8% gross yield. Preferred strategies are turnkey rentals or light rehab that can command rents of $980–$1,030/month for 2‑BR and $1,230–$1,280/month for 3‑BR. Allocate 10% of purchase price annually for maintenance, 5% for vacancy reserves, and 1.8% for taxes, ensuring positive cash flow. Focus on 2‑BR units in historic residential districts where tenant turnover is low, and avoid over‑leveraging to preserve liquidity.

Key Considerations: This market is primarily cash‑flow oriented with modest appreciation of 2–3% per year. Screen tenants with credit scores above 650, income at least 3× rent, and thorough reference checks to mitigate late payments. Budget 10% of purchase price for maintenance, 5% for vacancy, 1.8% for property taxes, and 8% of rent for professional management if investing remotely. The dominant risks are tenant quality, deferred maintenance from aging structures, and limited rental supply. Conservative financing and a disciplined reserve strategy are essential to maintain net yields.