Location: Dorchester County, MD | Metro: Dorchester County, MD
| Unit Size | Monthly FMR |
|---|---|
| Studio | $870 |
| 1 Bedroom | $970 |
| 2 Bedrooms | $1,160 |
| 3 Bedrooms | $1,610 |
| 4 Bedrooms | $1,940 |
| 5 Bedrooms | $2,250 |
| 6 Bedrooms | $2,520 |
| 7 Bedrooms | $2,722 |
| 8 Bedrooms | $2,858 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 21634 provides insight into the potential returns for landlords and small-portfolio investors considering participation in the program. To begin, let's annualize the Fair Market Rent (FMR) for a two-bedroom apartment, which stands at $1,140 per month for fiscal year 2026, based on metro area standards. This translates to an annual rental income of $13,680.
Given the median home value in the area is $309,741, we can calculate the implied gross yield under the Section 8 scenario. The gross yield is calculated by dividing the annual rental income by the property value. In this case, the gross yield would be approximately 4.42%. This figure is derived from the calculation $13,680 / $309,741 = 0.0442, or 4.42% when expressed as a percentage.
However, the market rent for the area is listed as N/A, indicating that there is insufficient data to determine the typical market rental rates for comparable properties. Without this information, it's challenging to provide a direct comparison between the Section 8 gross yield and the market yield. Nonetheless, if we were to assume that market rents would be higher than the Section 8 rates, the gross yield under market conditions would likely exceed 4.42%, potentially offering better returns for landlords who can secure tenants willing to pay market rates.
The analysis is further complicated by the 0.0% renter density in the area, suggesting that very few residents are currently renting. Additionally, the Days on Market (DOM) is listed as N/A, which means there is no data available on how long it takes to find a tenant. These factors indicate a low demand for rentals, making it difficult to predict whether a landlord could quickly fill a vacancy at market rates or even maintain a steady stream of Section 8 tenants.
In conclusion, while the Section 8 program offers a guaranteed gross yield of 4.42% for a two-bedroom unit in ZIP 21634, the lack of market rent data and the low renter density make it less certain whether this is the most realistic scenario for potential investment returns. Landlords should carefully consider these factors before deciding to participate in the program.
Data Sources: FMR data from HUD (2027). 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.