Location: Washington-Arlington-Alexandria, DC | Metro: Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $2,140 |
| 1 Bedroom | $2,230 |
| 2 Bedrooms | $2,470 |
| 3 Bedrooms | $3,150 |
| 4 Bedrooms | $3,710 |
| 5 Bedrooms | $4,304 |
| 6 Bedrooms | $4,820 |
| 7 Bedrooms | $5,206 |
| 8 Bedrooms | $5,466 |
The analysis of the Section 8 cap rate for ZIP code 20884 in Washington, D.C., reveals several key points. With an annualized Fair Market Rent (FMR) for a two-bedroom apartment set at $2100 for fiscal year 2024, the implied gross yield can be calculated once we have the median home value and market rent data.
However, the median home value and market rent for ZIP 20884 are currently unavailable. This makes it challenging to provide a precise cap rate calculation, as the cap rate is derived from the net operating income (NOI) divided by the property's value. Without the median home value, we cannot determine the exact gross yield. Similarly, without the market rent, it is impossible to compare the Section 8 rent to the market rent to understand the potential difference in yields.
In the absence of these critical figures, we can still infer that the Section 8 program provides a stable, government-backed rental income source for properties in ZIP 20884. The annualized FMR of $2100 offers a consistent revenue stream, which is particularly attractive in areas where renter density is high. Unfortunately, the renter density percentage and days on market (DOM) for this ZIP code are also not available, making it difficult to assess how competitive or realistic the Section 8 rent is compared to market conditions.
To provide a concrete comparison, if the market rent were higher than the Section 8 FMR, the gross yield from market rents would likely be greater. Conversely, if the market rent is lower or close to the Section 8 FMR, the yield from Section 8 could be considered more favorable or comparable. Landlords and small-portfolio investors must consider the trade-offs between the stability of Section 8 rents and the potentially higher yields from market rents when deciding whether to participate in the Section 8 program.
Given the limitations of the data, it is advisable for investors to conduct further research to obtain the missing figures and perform their own calculations. They should also consider the local housing market trends, the demand for affordable housing, and the administrative requirements associated with the Section 8 program before making investment decisions.
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.