Location: Baltimore-Columbia-Towson, MD | Metro: Baltimore-Columbia-Towson, MD MSA
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 | $1,610 |
| 1 Bedroom | $1,720 |
| 2 Bedrooms | $2,120 |
| 3 Bedrooms | $2,650 |
| 4 Bedrooms | $2,950 |
| 5 Bedrooms | $3,422 |
| 6 Bedrooms | $3,833 |
| 7 Bedrooms | $4,140 |
| 8 Bedrooms | $4,347 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,120 | $273,005 | 0.78% | D |
| 3BR | $2,650 | $342,847 | 0.77% | D |
| 4BR | $2,950 | $486,328 | 0.61% | D |
| 5BR | $3,422 | $563,164 | 0.61% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 21009 in Abingdon, MD, reveals a distinct difference between the Federal Market Rent (FMR) and the market rent rates, impacting the gross yield for potential investors.
Annualizing the 2BR FMR of $2020 for FY 2024, we calculate the annual rental income at $24,240. Given the median home value of $374,707, the implied gross yield from the FMR is approximately 6.47%. This figure is derived by dividing the annual rental income by the median home value. On the other hand, using the Zillow Observed Rental Index (ZORI) rate of $2,090 per month, the annual rental income becomes $25,080, resulting in an implied gross yield of about 6.69% when divided by the median home value.
Considering the 17.6% renter density and the 15-day days-on-market (DOM), the ZORI-based gross yield of 6.69% appears more realistic. The lower renter density suggests that a significant portion of the housing stock is owner-occupied, which could limit the availability of units for rent. Additionally, the shorter DOM indicates that properties are quickly rented out, supporting the higher market rent rate. While the FMR provides a benchmark, it often does not reflect the actual market conditions, especially in areas where demand outstrips supply, leading to higher rental rates.
For investors, the gross yield comparison is crucial. A yield of 6.69%, based on the market rate, offers a better return compared to the FMR-based yield of 6.47%. However, it's important to note that the FMR is designed to ensure affordability for low-income tenants, which means that while it might offer a slightly lower gross yield, it ensures a stable and reliable source of income through government subsidies. The choice between these yields depends on the investor's risk tolerance and investment goals.
In conclusion, the market-driven gross yield of 6.69% presents a more optimistic outlook for landlords and small-portfolio investors in ZIP 21009. This scenario aligns better with the current rental market dynamics, characterized by a relatively low renter density and quick property turnover, as evidenced by the 15-day DOM. Investors should use these figures to inform their decision-making process, keeping in mind the stability provided by Section 8 versus the potentially higher returns from market-rate rentals.
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.