Location: Philadelphia-Camden-Wilmington, PA | Metro: Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,590 |
| 1 Bedroom | $1,730 |
| 2 Bedrooms | $2,060 |
| 3 Bedrooms | $2,450 |
| 4 Bedrooms | $2,710 |
| 5 Bedrooms | $3,144 |
| 6 Bedrooms | $3,521 |
| 7 Bedrooms | $3,803 |
| 8 Bedrooms | $3,993 |
The analysis of the Section 8 cap-rate picture for ZIP code 19404 in Unknown, PA, reveals several key points that landlords and small-portfolio investors should consider. The Fair Market Rent (FMR) for a two-bedroom apartment in fiscal year 2024 is set at $1920 per month. To annualize this figure, multiply it by 12, resulting in an annual rental income of $23,040 for a two-bedroom unit.
Unfortunately, the median home value and the current market rent for ZIP 19404 are not available, making it challenging to calculate a precise cap rate or gross yield. However, we can still derive some insights based on the available data.
In the scenario where the median home value is not available, we cannot directly compute the gross yield. The gross yield is typically calculated as the annual rental income divided by the property's value. Without knowing the property's value, we cannot provide a specific gross yield percentage. This scenario highlights the importance of having comprehensive local market data before making investment decisions.
Given the lack of market rent data, it's also impossible to compare the Section 8 rental rates to the market rates, which would be crucial for understanding the potential profitability of properties under the Section 8 program. Typically, if the Section 8 rate is significantly lower than the market rate, it might indicate that the program is less attractive for landlords. Conversely, if the rates are close, it could suggest a more balanced situation.
The absence of renter density and days on market (DOM) data further complicates the analysis. Renter density helps to understand how many residents are likely to be renters, which impacts demand for rental units. Days on market gives insight into how quickly properties are rented out, indicating market health and landlord leverage. Both metrics are essential for gauging the local rental market dynamics.
In conclusion, while the annualized FMR for a two-bedroom unit in ZIP 19404 is $23,040, the lack of median home value, market rent, renter density, and DOM data prevents a concrete cap-rate and gross-yield comparison. Investors should seek additional local market data to make informed decisions about Section 8 investments in this area.
Data Sources: FMR data from HUD (2027).
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.