Location: Virginia Beach-Norfolk-Newport News, VA | Metro: Virginia Beach-Norfolk-Newport News, VA-NC HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,580 |
| 1 Bedroom | $1,600 |
| 2 Bedrooms | $1,790 |
| 3 Bedrooms | $2,470 |
| 4 Bedrooms | $2,910 |
| 5 Bedrooms | $3,376 |
| 6 Bedrooms | $3,781 |
| 7 Bedrooms | $4,083 |
| 8 Bedrooms | $4,287 |
The analysis of the Section 8 cap-rate picture for ZIP code 23326 in Virginia reveals some critical insights for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a 2-bedroom unit in fiscal year 2024 is set at $1620 annually. However, without the median home value and the exact market rent figures, it's challenging to provide a precise cap-rate calculation. Yet, we can still outline the implications of these figures.
In a scenario where the median home value is known, the gross yield would be calculated by dividing the annualized rental income by the median home value. For instance, if the median home value were hypothetically $300,000, the gross yield based on the Section 8 FMR would be 0.54% ($1620 / $300,000 * 100). This figure represents the percentage return on investment before expenses, assuming the property is valued at that amount.
When comparing this to the unknown market rent, the gross yield could potentially be higher, reflecting a premium over the Section 8 rate. However, without the specific market rent figure, it's impossible to state this yield definitively. If the market rent were significantly higher, say $1920 annually, and the median home value remained at $300,000, the gross yield would increase to 0.64%, demonstrating a better return on investment compared to the Section 8 scenario.
The lack of specific data points such as the exact renter density percentage and days on market (DOM) makes it difficult to determine which scenario is more realistic. Renter density typically influences the demand for rental properties, while DOM indicates how quickly properties are leased. A higher renter density and lower DOM suggest a more favorable environment for renting at market rates.
In conclusion, while the Section 8 FMR provides a stable, though modest, gross yield, the potential for higher returns exists with market rents. Investors should consider the broader real estate market dynamics in ZIP 23326 to make informed decisions. The actual performance will depend on local conditions and the specific property being analyzed.
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.