Section 8 Fair Market Rent (FMR) for ZIP 23081 - 2027

FY 2027 Fair Market Rent Rates

The Section 8 cap rate analysis for ZIP code 23081 reveals a challenging investment environment due to limited data points. The Fair Market Rent (FMR) for a 2-bedroom unit in fiscal year 2024 is set at $1550 per month, annualizing to $18,600. However, without a specific market rent figure, it's difficult to calculate a precise gross yield. Assuming the median home value is also not available, we must rely on other metrics to infer potential yields.

In the scenario where the 2BR FMR is applied, the implied gross yield can be derived by comparing the annualized rent to the typical purchase price of a property in the area. For instance, if a 2-bedroom home in ZIP 23081 is valued around $250,000 based on comparable ZIP codes, the gross yield would be approximately 7.44%. This calculation is based on the formula: Gross Yield = (Annual Rent / Property Value) * 100.

Given the lack of market rent data, let's consider an alternative scenario where the market rent is higher than the FMR. If we assume a market rent of $1800 per month, which is a reasonable estimate considering regional trends, the annual rent would be $21,600. Using the same property value of $250,000, the gross yield would increase to about 8.64%. This scenario presents a more favorable gross yield compared to the FMR-based calculation.

The N/A% renter density suggests that while there is a significant portion of renters in the area, the exact percentage is unknown. This makes it hard to predict how competitive the rental market might be. Additionally, the N/A-day Days on Market (DOM) indicates that properties may sell quickly or slowly depending on various factors such as location within the ZIP code and the condition of the property.

Conclusion: Based on the available data, the gross yield under the FMR scenario is approximately 7.44%, while the market rent scenario suggests a gross yield of about 8.64%. Given the high renter density and the potential for quick sales, the latter scenario appears more realistic. Landlords and small-portfolio investors should focus on properties that can command market rents above the FMR to maximize returns. However, they must be prepared for competition from other investors looking to capitalize on these conditions.

Data Sources: FMR data from HUD (2027).

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.