Location: Philadelphia-Camden-Wilmington, PA | Metro: Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,320 |
| 1 Bedroom | $1,430 |
| 2 Bedrooms | $1,710 |
| 3 Bedrooms | $2,040 |
| 4 Bedrooms | $2,250 |
| 5 Bedrooms | $2,610 |
| 6 Bedrooms | $2,923 |
| 7 Bedrooms | $3,157 |
| 8 Bedrooms | $3,315 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,710 | $211,860 | 0.81% | C |
| 3BR | $2,040 | $263,788 | 0.77% | D |
| 4BR | $2,250 | $327,517 | 0.69% | D |
| 5BR | $2,610 | $352,686 | 0.74% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 19018, Clifton Heights, PA, reveals an interesting investment landscape. To start, we annualize the Fair Market Rent (FMR) for a two-bedroom apartment, which is set at $1590 per month for fiscal year 2024. This translates to an annual income of $19,080. The median home value in the area is $261,129, allowing us to calculate the implied gross yield for a Section 8 property. Using the FMR, the gross yield is approximately 7.31%, calculated as $19,080 divided by $261,129.
Next, we consider the Zillow Observed Rent Index (ZORI), which indicates a market rent of $1,444 per month. This equates to an annual market rent of $17,328. When this figure is used against the median home value, the gross yield drops to about 6.64%. This calculation is based on $17,328 divided by $261,129.
The difference between these yields is significant, with the Section 8 scenario providing a higher gross yield compared to the market rent scenario. However, the choice of which yield to use should be informed by the local rental market dynamics and the specific goals of the investor. Given that the renter density in Clifton Heights is 34.9%, it suggests a moderate demand for rentals, neither excessively high nor low. This density level implies that there is a reasonable market for both Section 8 tenants and regular market renters.
The N/A-day Days on Market (DOM) statistic indicates incomplete data regarding how quickly properties are rented out, which could be due to various factors including seasonal trends or the nature of the Section 8 program itself. Despite this lack of detail, the higher gross yield from the Section 8 scenario can be seen as a more stable option, considering the guaranteed income from the government program. On the other hand, the lower gross yield from market rents might be offset by potentially faster lease-up times and the ability to adjust rents based on market conditions.
In conclusion, while the Section 8 scenario offers a more robust gross yield of 7.31%, the market rent scenario provides a slightly less attractive but still viable yield of 6.64%. Investors should weigh the stability of guaranteed income against the flexibility of market-driven rents when deciding which route to take in Clifton Heights, PA.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.