Location: Reading, PA | Metro: Allentown-Bethlehem-Easton, PA HUD Metro FMR Area
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 | $1,200 |
| 1 Bedroom | $1,370 |
| 2 Bedrooms | $1,710 |
| 3 Bedrooms | $2,110 |
| 4 Bedrooms | $2,300 |
| 5 Bedrooms | $2,668 |
| 6 Bedrooms | $2,988 |
| 7 Bedrooms | $3,227 |
| 8 Bedrooms | $3,388 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,710 | $343,119 | 0.5% | F |
| 3BR | $2,110 | $412,905 | 0.51% | F |
| 4BR | $2,300 | $558,912 | 0.41% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 19529 in Kempton, PA, provides a clear snapshot of potential investment yields. With the Fair Market Rent (FMR) for a 2-bedroom unit set at $1300 annually (FY 2024), and the market rent at $1,474 based on Census ACS data, we can calculate the gross yield against the median home value of $431,880.
First, annualizing the FMR gives us an annual rental income of $15,600 ($1300 x 12 months). Using this figure, the implied gross yield for a Section 8 property in ZIP 19529 is approximately 3.61%. This calculation is derived from dividing the annual rental income by the median home value: $15,600 / $431,880 = 0.0361, or 3.61%. For context, the market rent of $1,474 translates to an annual rental income of $17,688 ($1,474 x 12 months), leading to a gross yield of about 4.09%: $17,688 / $431,880 = 0.0409, or 4.09%.
The gross yield comparison highlights that market rent properties in ZIP 19529 offer a higher potential return compared to Section 8 properties. However, the decision between the two should also consider other factors such as the stability of Section 8 income and the management requirements associated with government programs.
Given the 15.4% renter density in ZIP 19529, it's important to note that while there is a significant number of renters, it may not be enough to sustain high market rents across all units. The N/A-day DOM (days on market) indicates that there isn't sufficient data to determine how quickly properties are typically sold in this area, which could suggest either a robust or sluggish market, depending on broader regional trends.
In conclusion, while the market rent scenario offers a higher gross yield of 4.09%, the Section 8 scenario with its 3.61% gross yield provides a more stable and predictable income stream. The choice between the two depends on the investor's risk tolerance and investment goals.
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.