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 | $2,090 |
| 1 Bedroom | $2,230 |
| 2 Bedrooms | $2,750 |
| 3 Bedrooms | $3,440 |
| 4 Bedrooms | $3,820 |
| 5 Bedrooms | $4,431 |
| 6 Bedrooms | $4,963 |
| 7 Bedrooms | $5,360 |
| 8 Bedrooms | $5,628 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,750 | $406,860 | 0.68% | D |
| 3BR | $3,440 | $529,710 | 0.65% | D |
| 4BR | $3,820 | $721,570 | 0.53% | F |
| 5BR | $4,431 | $1,050,613 | 0.42% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 21037, Edgewater, MD, provides valuable insights into potential investment returns. To calculate the gross yield, we must first consider the Fair Market Rent (FMR) and the Zillow Observed Rent Index (ZORI).
The annualized FMR for a 2-bedroom apartment in Edgewater, MD, for FY 2024 is $2550. Given the median home value of $577,543, the implied gross yield based on the FMR is approximately 0.44%. This figure is calculated by dividing the annual rent ($2550) by the median home value ($577,543).
In contrast, the ZORI for a 2-bedroom apartment is $3,075 annually. Using the same median home value, the implied gross yield based on the ZORI is about 0.53%. This calculation is derived similarly by dividing the annual market rent ($3,075) by the median home value ($577,543).
Considering the 11.3% renter density and the average 21-day Days on Market (DOM), the scenario using the ZORI appears more realistic. The higher gross yield of 0.53% aligns better with the local rental market conditions, suggesting that landlords can expect to achieve closer to market rents rather than the lower FMR.
The lower gross yield of 0.44%, based on the FMR, might be relevant for properties that struggle to attract tenants or face significant competition. However, given the relatively low DOM of 21 days, it indicates a strong demand for rentals, making the ZORI-based gross yield a more practical expectation.
To summarize, while the FMR suggests a gross yield of 0.44%, the ZORI implies a higher gross yield of 0.53%. For investors looking to enter the Edgewater, MD, market, the latter figure is likely a more accurate representation of what they can expect, considering the current rental dynamics and property values.
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.