Location: Philadelphia-Camden-Wilmington, PA | Metro: Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,040 |
| 1 Bedroom | $1,130 |
| 2 Bedrooms | $1,350 |
| 3 Bedrooms | $1,610 |
| 4 Bedrooms | $1,770 |
| 5 Bedrooms | $2,053 |
| 6 Bedrooms | $2,299 |
| 7 Bedrooms | $2,483 |
| 8 Bedrooms | $2,607 |
U.S. Census Bureau data (2024)
In ZIP code 19133, located in Philadelphia, PA, a skeptical investor might raise several concerns regarding the feasibility of renting properties to Section 8 tenants. Here are some common objections and their corresponding analyses based on available data.
Objection 1: Will the Fair Market Rent (FMR) of $1,230 for the fiscal year 2024 cover the mortgage on a $85,427 home?
The FMR of $1,230 is the maximum amount that the government will pay for a rental unit in the 19133 zip code. To determine whether this covers the mortgage, we need to calculate the monthly mortgage payment. Assuming a 30-year fixed-rate mortgage at an average interest rate of 4%, the monthly mortgage payment on an $85,427 home would be approximately $400. This means that the FMR of $1,230 is more than sufficient to cover the mortgage payment, leaving room for additional expenses such as maintenance and insurance.
Objection 2: Is there enough renter demand at 56.9%?
The 56.9% figure represents the percentage of renter-occupied housing units in the 19133 zip code. According to the data, this indicates a strong rental market, with a significant portion of housing units being rented out. Additionally, the median rent in this area is around $2,000, which suggests that there is a robust demand for rental properties. While the exact number of Section 8 tenants is not specified, the overall high rental demand implies that there should be sufficient interest from qualified voucher holders.
Objection 3: Will vouchers keep pace with market rents of $1,498?
The market rents of $1,498 reflect the average monthly rent in the 19133 zip code. However, the FMR of $1,230 is lower than the market rent. This discrepancy means that landlords might have to accept a slightly reduced rent compared to the market rate. Nevertheless, the FMR is designed to ensure that rents are affordable for low-income families while still covering a reasonable portion of the market rent. It is important to note that voucher payments can vary based on the tenant's income, but the FMR serves as a cap.
Investors must weigh these factors carefully. While the FMR does not fully match the market rent, it provides a stable and predictable source of income that can effectively cover the mortgage and other expenses. The high percentage of renter-occupied units signals a vibrant rental market, which is beneficial for finding tenants. However, the data does not specify the exact number of Section 8 tenants in the area, so there is some uncertainty regarding the precise demand for voucher-assisted rentals.
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.