Location: Washington-Arlington-Alexandria, DC | Metro: Washington-Arlington-Alexandria, DC-VA-MD 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 | $2,220 |
| 1 Bedroom | $2,310 |
| 2 Bedrooms | $2,560 |
| 3 Bedrooms | $3,260 |
| 4 Bedrooms | $3,840 |
| 5 Bedrooms | $4,454 |
| 6 Bedrooms | $4,988 |
| 7 Bedrooms | $5,387 |
| 8 Bedrooms | $5,656 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,560 | $253,064 | 1.01% | B |
| 3BR | $3,260 | $431,676 | 0.76% | D |
| 4BR | $3,840 | $477,089 | 0.8% | C |
| 5BR | $4,454 | $510,313 | 0.87% | C |
U.S. Census Bureau data (2024)
The ZIP code 20740, located in College Park, MD, presents a unique opportunity for real estate investors. Based on the provided data, this area leans towards a high-yield market with moderate stability.
The Federal Market Rent (FMR) for ZIP 20740 in fiscal year 2024 is set at $1,800, while the average market rent is $2,400. This indicates that properties can be rented above the FMR, potentially offering higher yields for landlords participating in the Section 8 program. The median home value in this ZIP is $438,663, which suggests a relatively affordable entry point compared to the rental income potential.
Stability in this market is driven by several factors. With 63.3% of residents being renters, there is a substantial demand for rental housing. However, the Days on Market (DOM) figure stands at 42 days, which is longer than what might be seen in highly stable markets where demand outstrips supply. This suggests that while there is significant rental demand, there is also competition among landlords, which could affect pricing and occupancy rates.
The median household income of $77,317 provides insight into the financial health of the tenants, indicating that they are likely able to afford the market rent of $2,400. This supports the idea that the area can sustain higher rental prices, although the income level may not be as robust as in other high-income areas, potentially affecting long-term stability.
To summarize, ZIP 20740 offers a high-yield environment due to the disparity between FMR and market rent, combined with a median home value that makes it attractive for investment. However, the stability is moderate, given the balance between a strong rental market and the potential for fluctuation in tenant income levels. This market is best suited for those who can handle some volatility in cash flow but are looking for higher returns.
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.