Location: Washington-Arlington-Alexandria, DC | Metro: Washington-Arlington-Alexandria, DC-VA-MD HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,730 |
| 1 Bedroom | $1,800 |
| 2 Bedrooms | $1,990 |
| 3 Bedrooms | $2,540 |
| 4 Bedrooms | $2,990 |
| 5 Bedrooms | $3,468 |
| 6 Bedrooms | $3,884 |
| 7 Bedrooms | $4,195 |
| 8 Bedrooms | $4,405 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 21714 reveals some interesting insights into potential investment opportunities. The Fair Market Rent (FMR) for a 2-bedroom apartment in this area, as of FY 2024, is set at an annualized rate of $1810. However, the median home value and market rent data are not available, making it challenging to derive a precise cap-rate scenario. Nonetheless, we can still provide a general understanding based on the available FMR.
In ZIP 21714, the annualized 2BR FMR of $1810 suggests that the implied gross yield for a property rented through the Section 8 program would be relatively low. This figure is significantly below typical market rents, which often serve as a benchmark for assessing rental income potential. Given that the market rent is currently unavailable, we cannot provide a direct comparison to the FMR. However, if we consider that market rents are generally higher than FMRs, the disparity between the two could result in a lower gross yield when comparing the FMR to the hypothetical market rent.
The lack of median home value data further complicates the cap-rate calculation, as it is a critical component in determining the property's value relative to its income-generating capacity. Without this information, we cannot calculate a specific cap-rate percentage. However, it is important to note that the renter density in this ZIP code is reported at 0.0%, indicating a very low demand for rental properties. Additionally, the Days on Market (DOM) data is also not available, which typically helps in assessing how quickly properties are leased. These factors suggest that the likelihood of finding a steady stream of Section 8 tenants might be limited, affecting the overall attractiveness of this ZIP code for such investments.
Given the available data, the implied gross-yield based on the FMR is lower compared to what might be expected from market rents. Therefore, relying solely on Section 8 rents could result in a less favorable return on investment. Landlords and small-portfolio investors should carefully consider these factors before committing to properties in ZIP 21714, especially those targeting Section 8 tenants.
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.