Location: Charlottesville, VA | Metro: Charlottesville, VA MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,330 |
| 1 Bedroom | $1,500 |
| 2 Bedrooms | $1,710 |
| 3 Bedrooms | $2,070 |
| 4 Bedrooms | $2,550 |
| 5 Bedrooms | $2,958 |
| 6 Bedrooms | $3,313 |
| 7 Bedrooms | $3,578 |
| 8 Bedrooms | $3,757 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 22904 reveals some interesting dynamics between government-subsidized rents and market rents. For the fiscal year 2024, the Fair Market Rent (FMR) for a two-bedroom apartment in this ZIP code is set at $1710 annually. In contrast, the Census American Community Survey (ACS) reports that the market rent for a similar unit is approximately $1,063 annually.
To derive the gross yield for each scenario, we need to consider the annual rent revenue against the median home value. However, the median home value for ZIP 22904 is not available, which complicates the direct calculation of a cap rate. Despite this, we can still provide an implied gross yield based on the annual rent figures.
In the case of Section 8 rental income, the annual rent of $1710 implies a higher gross yield compared to the market rent of $1,063. This is because the guaranteed rental income from the government program tends to be closer to market rates or even slightly above them, ensuring a stable cash flow for landlords.
Given that ZIP 22904 has a 100.0% renter density, it suggests that there is a strong demand for rental properties in this area. The lack of available data on the median home value and days on market (DOM) makes it difficult to provide a precise cap rate, but it is clear that the Section 8 rent provides a more consistent and potentially higher gross yield when compared to the lower market rent.
The higher gross yield from Section 8 rentals is more realistic given the guaranteed nature of the income and the high renter density in the area. While the exact cap rate cannot be determined without the median home value, the stability and predictability of Section 8 payments offer a compelling option for landlords and small-portfolio investors looking to mitigate risk in their investment properties.
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.