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 | $1,230 |
| 1 Bedroom | $1,360 |
| 2 Bedrooms | $1,680 |
| 3 Bedrooms | $2,130 |
| 4 Bedrooms | $2,350 |
| 5 Bedrooms | $2,726 |
| 6 Bedrooms | $3,053 |
| 7 Bedrooms | $3,297 |
| 8 Bedrooms | $3,462 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,130 | $585,784 | 0.36% | F |
| 4BR | $2,350 | $724,975 | 0.32% | F |
| 5BR | $2,726 | $851,436 | 0.32% | F |
U.S. Census Bureau data (2024)
The analysis for ZIP code 21013 reveals a distinct difference between the Section 8 Fair Market Rent (FMR) and the market rent for a two-bedroom property, which has implications for the capitalization rate (cap-rate) that investors can expect. For the fiscal year 2024, the annualized FMR for a two-bedroom unit in ZIP 21013 is set at $1400 per month. This translates into an annual rental income of $16,800. Given the median home value of $664,542 in this area, the implied gross yield based on the FMR would be approximately 2.53%. The calculation is straightforward: divide the annual rental income by the median home value ($16,800 / $664,542).
In contrast, the market rent for a two-bedroom unit, according to the Census ACS data, is $1,183 per month. This results in an annual rental income of $14,196. Using the same median home value, the implied gross yield based on market rent would be about 2.14% ($14,196 / $664,542).
The gross yield comparison clearly shows that the Section 8 FMR scenario provides a higher return compared to the market rent scenario. However, the choice between these two scenarios must also consider the local rental market conditions. With a renter density of only 6.2%, it suggests that the majority of homes in ZIP 21013 are owner-occupied, which could limit the number of available rental properties and potentially affect the demand for Section 8 units.
The fact that the days on market (DOM) data is marked as N/A further complicates the analysis. This lack of information means that we cannot assess how quickly rental properties are typically leased in this area, which is a critical factor for determining the feasibility of a rental investment. Despite this uncertainty, the higher gross yield offered by the Section 8 FMR scenario makes it more attractive for investors looking to capitalize on government-assisted housing programs.
However, it's important to note that while the Section 8 program offers a stable source of income, it also comes with regulatory compliance requirements and potential limitations on tenant turnover, which can impact overall profitability. Therefore, while the gross yield from the FMR is higher, the actual net operating income (NOI) may vary depending on these factors.
To summarize, the Section 8 FMR scenario in ZIP 21013 implies a gross yield of 2.53%, whereas the market rent scenario implies a gross yield of 2.14%. The higher yield from the FMR is more appealing, but investors should carefully evaluate the local rental market dynamics and the specific challenges associated with Section 8 properties before making any investment decisions.
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.