Location: Harrisburg-Carlisle, PA | Metro: Harrisburg-Carlisle, PA MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,020 |
| 1 Bedroom | $1,130 |
| 2 Bedrooms | $1,400 |
| 3 Bedrooms | $1,800 |
| 4 Bedrooms | $1,840 |
| 5 Bedrooms | $2,134 |
| 6 Bedrooms | $2,390 |
| 7 Bedrooms | $2,581 |
| 8 Bedrooms | $2,710 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 17024 reveals some interesting dynamics between government-subsidized rental income and market rents. For a two-bedroom unit, the Fair Market Rent (FMR) for FY 2024 is set at $1,140 annually, while the Census ACS reports a market rent of $1,025 per month.
Annualizing these figures, the FMR amounts to $13,680 per year, whereas the market rent totals $12,300 annually. To derive the gross yield, we need to compare these annual incomes against the median home value in the area, which stands at $348,065.
Using the FMR, the implied gross yield for a two-bedroom property in ZIP 17024 would be approximately 3.93%. This calculation is derived by dividing the annual FMR ($13,680) by the median home value ($348,065).
In contrast, the market rent scenario implies a gross yield of about 3.53%, calculated by dividing the annual market rent ($12,300) by the same median home value ($348,065).
The difference between these yields is significant, reflecting the higher potential income from Section 8 subsidies compared to market rates. However, the reality of the situation is influenced by the 10.1% renter density in the area, indicating that only a small portion of the population is actively seeking rental housing. This low density suggests that there might be challenges in securing tenants, even with government support.
Moreover, the lack of data on days on market (DOM) means we cannot accurately gauge how quickly properties might be leased. This uncertainty adds another layer of risk to the investment, particularly if landlords rely on market rents rather than Section 8 subsidies.
In conclusion, while the Section 8 scenario offers a slightly higher gross yield at 3.93% compared to the 3.53% from market rents, the actual performance could be lower due to the competitive nature of the local rental market and the difficulty in finding eligible tenants. Landlords and investors should carefully consider these factors before making any decisions based solely on the higher FMR yield.
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.