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 | $2,160 |
| 1 Bedroom | $2,340 |
| 2 Bedrooms | $2,790 |
| 3 Bedrooms | $3,320 |
| 4 Bedrooms | $3,670 |
| 5 Bedrooms | $4,257 |
| 6 Bedrooms | $4,768 |
| 7 Bedrooms | $5,149 |
| 8 Bedrooms | $5,406 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,790 | $559,283 | 0.5% | F |
| 3BR | $3,320 | $578,301 | 0.57% | F |
| 4BR | $3,670 | $757,469 | 0.48% | F |
| 5BR | $4,257 | $927,264 | 0.46% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 19025, located in Dresher, PA, provides valuable insights into the potential returns for landlords and small-portfolio investors. To begin, let's consider the Fair Market Rent (FMR) for a two-bedroom apartment, which stands at an annualized figure of $2610 for fiscal year 2024. Given the median home value in the area is $707,576, the implied gross yield based on the FMR would be approximately 0.37%. This calculation is derived by dividing the annualized FMR by the median home value.
In contrast, the market rent for a similar property is reported at $3,051 annually according to the Census ACS. Using this figure, the implied gross yield increases to about 0.43%. This higher yield reflects the premium that market rents can command over government-set FMRs.
To determine which scenario is more realistic, we must consider the local rental market dynamics. With a renter density of 25.6%, it suggests that the majority of homeowners in Dresher, PA, are owner-occupiers rather than landlords. This low renter density could indicate a less competitive rental market, potentially making the higher market rent scenario more plausible. However, the lack of data on the days on market (DOM) for rentals makes it difficult to gauge how quickly properties might lease at market rates versus Section 8 rates.
Given these figures, landlords should understand that the gross yield from Section 8 tenants is significantly lower compared to market-rate tenants. The 0.37% yield based on FMR is a conservative estimate, whereas the 0.43% yield based on market rent represents a more optimistic outlook. Investors should weigh the benefits of stable, long-term tenancy provided by Section 8 against the higher yields available through market-rate rentals.
Ultimately, the decision between accepting Section 8 tenants or renting at market rates depends on the landlord's investment goals and risk tolerance. While market-rate rentals offer a higher gross yield, the predictability of Section 8 payments and the support from the program can provide financial stability for those who prefer a steady income stream.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.