Location: Sussex County, DE | Metro: Sussex County, DE
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 | $1,180 |
| 1 Bedroom | $1,190 |
| 2 Bedrooms | $1,550 |
| 3 Bedrooms | $1,910 |
| 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 | $1,550 | $295,923 | 0.52% | F |
| 3BR | $1,910 | $419,166 | 0.46% | F |
| 4BR | $2,300 | $601,249 | 0.38% | F |
U.S. Census Bureau data (2024)
In evaluating the potential of investing in ZIP 19939, Dagsboro, DE, several key points arise that might concern a landlord or a small-portfolio investor. Let's address these concerns directly using available data.
Objection 1: Will Fair Market Rent (FMR) of $1270 cover the mortgage on a $445,947 home?
The FMR of $1270 for ZIP 19939 in fiscal year 2024 does not fully cover the mortgage on a home valued at $445,947. Assuming a standard 30-year fixed-rate mortgage at an average interest rate of 4%, the monthly mortgage payment would be approximately $2100. This figure is significantly higher than the FMR, indicating that relying solely on FMR to cover mortgage payments would result in a shortfall. However, it's important to note that the FMR is a guideline set by HUD for housing assistance programs and does not necessarily reflect the market rent levels. Landlords can charge more than the FMR if the market supports it.
Objection 2: Is there enough renter demand at 7.9%?
The percentage of renter-occupied units at 7.9% in ZIP 19939 suggests a relatively low demand for rental properties compared to owner-occupied homes. This could indicate that finding tenants might be challenging. However, the percentage alone does not provide a complete picture. To assess the actual demand, we need to consider the total number of units and the vacancy rate. The data provided does not include these details, but it's worth noting that even with a low percentage of rental units, the absolute number of renters could still support a viable investment. A thorough local market analysis, including vacancy rates and tenant demographics, would offer a clearer understanding of the rental landscape.
Objection 3: Will vouchers keep pace with $1,317 market rents?
The voucher amount, which is tied to the FMR of $1270, is lower than the market rent of $1,317 in ZIP 19939. This discrepancy means that landlords who accept vouchers will receive less than the market rent for their properties. While vouchers can help stabilize occupancy, they may not fully compensate for the difference between the FMR and the actual market rent. It's crucial to understand the local subsidy policies and any adjustments planned for future years. Additionally, landlords should consider the potential benefits of accepting vouchers, such as reduced vacancy risk and the ability to serve a stable tenant population.
In summary, while the data raises some concerns regarding the coverage of mortgage payments by FMR, the level of renter demand, and the adequacy of voucher amounts, it also highlights the importance of a detailed local market analysis to make informed decisions. ZIP 19939 presents both challenges and opportunities that must be carefully weighed.
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.