Location: Virginia Beach-Norfolk-Newport News, VA | Metro: Virginia Beach-Norfolk-Newport News, VA-NC HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,680 |
| 1 Bedroom | $1,700 |
| 2 Bedrooms | $1,900 |
| 3 Bedrooms | $2,620 |
| 4 Bedrooms | $3,090 |
| 5 Bedrooms | $3,584 |
| 6 Bedrooms | $4,014 |
| 7 Bedrooms | $4,335 |
| 8 Bedrooms | $4,552 |
The Section 8 thesis in ZIP code 23463 is built around the discrepancy between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR stands at $1700, while the market rent is currently unknown. This gap, if it exists, would be crucial for understanding the financial dynamics of renting properties in this area under the Section 8 program.
In Unknown, VA, where the median home value and median income are also unspecified, the percentage of renters is unknown. Despite these missing details, the analysis can still focus on the FMR figure to gauge the potential benefits and challenges of accepting Section 8 tenants.
If the FMR exceeds the market rent, then properties in ZIP 23463 become a yield play for landlords. Voucher tenants provide a guaranteed income stream that is often higher than what could be obtained through regular market rent. This scenario would allow landlords to potentially earn more per unit than they would from non-voucher tenants, thus increasing their overall portfolio yield.
Conversely, if the FMR is lower than the market rent, landlords must consider the cost implications of housing voucher tenants below open-market rates. Accepting Section 8 tenants would mean receiving less rent than the property could command in the open market, which might affect profitability. However, the stability of rental income and the reduction in vacancy rates could offset these lower rents, making it a strategic decision for some landlords.
The key to successful Section 8 investment in ZIP 23463 lies in understanding the local rental market and how the FMR compares to it. Once the market rent is known, the exact gap can be calculated in dollars and as a percentage, providing a clearer picture of the financial landscape for both landlords and small-portfolio investors.
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.