Location: Virginia Beach-Norfolk-Newport News, VA | Metro: Virginia Beach-Norfolk-Newport News, VA-NC HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,160 |
| 1 Bedroom | $1,180 |
| 2 Bedrooms | $1,320 |
| 3 Bedrooms | $1,820 |
| 4 Bedrooms | $2,150 |
| 5 Bedrooms | $2,494 |
| 6 Bedrooms | $2,793 |
| 7 Bedrooms | $3,016 |
| 8 Bedrooms | $3,167 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 23056 reveals some interesting insights into potential investment opportunities. To start, let's consider the Federal Market Rent (FMR) for a 2-bedroom unit, which is set at $1200 per month for fiscal year 2024. This translates to an annual rental income of $14,400. Against the median home value of $354,514, the implied gross yield for this scenario is approximately 4.06%. This calculation provides a baseline for understanding the potential returns when relying solely on Section 8 payments.
However, the market rent for 23056 is listed as N/A, indicating that there is insufficient data to determine a typical market rate for rental properties. If we were to assume that the market rent is higher than the FMR, the gross yield would increase proportionally. For instance, if the market rent for a similar 2-bedroom property was $1500 per month, the annual rental income would be $18,000, leading to a gross yield of about 5.08%. This higher yield reflects the potential benefits of receiving market rates rather than government-set rents.
Given the 0.0% renter density in ZIP 23056, it becomes evident that the reliance on Section 8 tenants might be limited. The lack of data on the days on market (DOM) further complicates the analysis, as it does not provide insight into how quickly properties are rented out. Despite these challenges, the gross yield comparison remains crucial for investors. A 4.06% gross yield based on FMRs is conservative and represents a guaranteed income stream, whereas a 5.08% gross yield, while speculative due to the N/A market rent, suggests a potentially more lucrative opportunity if market conditions allow for higher rents.
In conclusion, the cap-rate picture for ZIP 23056 is primarily influenced by the reliance on Section 8 payments versus the possibility of achieving market rents. With a median home value of $354,514, the FMR-based gross yield of 4.06% offers a stable but modest return, whereas the higher market rent scenario, with a gross yield of 5.08%, presents a more optimistic outlook. However, the actual feasibility of securing market rents must be evaluated carefully, considering the local rental market dynamics and tenant preferences.
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.