Location: Philadelphia-Camden-Wilmington, PA | Metro: Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,400 |
| 1 Bedroom | $1,520 |
| 2 Bedrooms | $1,810 |
| 3 Bedrooms | $2,160 |
| 4 Bedrooms | $2,440 |
| 5 Bedrooms | $2,830 |
| 6 Bedrooms | $3,170 |
| 7 Bedrooms | $3,424 |
| 8 Bedrooms | $3,595 |
The analysis of the Section 8 cap-rate scenario for ZIP code 19710 reveals some critical insights into potential investment opportunities. The Fair Market Rent (FMR) for a two-bedroom apartment in this area for FY 2024 is set at $2080 annually. However, the median home value and market rent data are currently unavailable, which impacts the ability to provide a comprehensive cap-rate comparison.
In the context of Section 8 properties, the cap rate is a crucial metric for understanding the potential return on investment. It is calculated by dividing the annual rental income by the property's value. Given that the median home value is not available, we can only infer the gross yield based on the FMR. If a landlord were to rely solely on the FMR for a two-bedroom unit, the gross yield would be determined by the annual rental income relative to the property's value. Without the specific property value, we cannot calculate an exact cap rate, but we can discuss the implications of using FMR versus market rent.
When the market rent data is unavailable, it suggests that there might be limited data on the local rental market, possibly due to low renter density or other factors affecting the availability of rental listings. In ZIP 19710, the renter density is also not specified, which makes it challenging to gauge how competitive the rental market is and whether relying on FMR alone is sufficient for a landlord's investment strategy.
The Days on Market (DOM) figure is likewise not provided, which is important for understanding how quickly rental units are typically filled. A lower DOM indicates a stronger rental market where units are occupied faster, potentially leading to higher market rents above the FMR. Conversely, a higher DOM could suggest a slower market where landlords might have to accept the FMR to secure tenants.
Given the lack of specific market rent and median home value data, the most concrete comparison we can make is between the FMR and what would be expected if market rent data were available. If market rent were significantly higher than the FMR, the gross yield would increase, offering a better return on investment. However, without this data, it is difficult to determine which scenario is more realistic for ZIP 19710.
Investors should consider the broader economic context of the area, including employment rates, population growth, and housing demand, to make informed decisions about the likely market conditions. These factors can influence whether the FMR provides a fair representation of rental income potential or if market rents are likely to exceed the FMR.
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.