Location: Columbia County, PA | Metro: Scranton--Wilkes-Barre, PA MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $830 |
| 1 Bedroom | $970 |
| 2 Bedrooms | $1,190 |
| 3 Bedrooms | $1,530 |
| 4 Bedrooms | $1,700 |
| 5 Bedrooms | $1,972 |
| 6 Bedrooms | $2,209 |
| 7 Bedrooms | $2,386 |
| 8 Bedrooms | $2,505 |
U.S. Census Bureau data (2024)
A landlord considering purchasing a property in ZIP code 18635 for Section 8 purposes must evaluate several key factors to make an informed decision. The first question is whether the Fair Market Rent (FMR) of $1,010 for the fiscal year 2024 can cover the debt service on a property valued at $242,823. To determine this, one needs to calculate the monthly mortgage payment, including principal, interest, taxes, and insurance, and compare it against the FMR. If the FMR exceeds the total monthly debt service, then the answer is yes; otherwise, it's a no.
The second critical point is comparing the FMR to the actual market rent. In ZIP 18635, the market rent is $896 according to the Census ACS data. If the FMR is higher than the market rent, which it is in this case, then the property is a good candidate for Section 8 as it ensures that the rent collected will be sufficient. If the FMR equals or falls below the market rent, it means that the market rent might not be fully covered by the Section 8 payment, making it less attractive for investment.
The third consideration involves assessing the rental demand. With 19.3% of the population being renters, there is a notable demand for rental properties. However, the lack of data on days on the market (DOM) makes it difficult to gauge how quickly rental units turn over. If the DOM is low, indicating fast turnover, combined with a high percentage of renters, the answer would be yes, there is enough demand. Conversely, if the DOM is high, suggesting slow turnover, the answer would be no, as the investment might not be profitable due to prolonged vacancies.
Based on these criteria, if the FMR of $1,010 clears the debt service and the market rent of $896 is lower, coupled with a significant portion of the population renting and a low DOM, then the answer is a clear yes. The FMR is above the market rent, ensuring that the landlord will receive adequate compensation. The high percentage of renters indicates strong demand, and a low DOM suggests efficient market dynamics, minimizing vacancy periods.
If any of these conditions are not met, such as the FMR not covering debt service or the market rent being equal to or higher than the FMR, the decision would lean towards no. It would also depend if the rental demand is not sufficiently supported by DOM data, leading to a cautious "it depends" response, urging further investigation into local market conditions and property-specific details.
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.