Location: Charlotte County, VA | Metro: Lynchburg, VA MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $930 |
| 1 Bedroom | $930 |
| 2 Bedrooms | $1,070 |
| 3 Bedrooms | $1,480 |
| 4 Bedrooms | $1,590 |
| 5 Bedrooms | $1,844 |
| 6 Bedrooms | $2,065 |
| 7 Bedrooms | $2,230 |
| 8 Bedrooms | $2,342 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate picture for ZIP code 23963 reveals a few key points. The Fair Market Rent (FMR) for a 2-bedroom apartment in this area for fiscal year 2024 is set at $990 per month. To annualize this figure, we multiply by 12, resulting in an annual rental income of $11,880 for a 2-bedroom unit under Section 8.
The median home value in ZIP 23963 is $221,873. Assuming a typical 2-bedroom apartment might be valued at around 50% of the median home value, we can estimate the property value of such an apartment to be approximately $110,936.50. Using these figures, the implied gross yield for a Section 8 property would be roughly 10.7%. This calculation is derived from dividing the annualized rental income ($11,880) by the estimated property value ($110,936.50).
However, without a specific market rent figure, it's challenging to provide a direct comparison. The absence of market rent data suggests that either the market is not well-established for rental properties in this area, or there is insufficient data to provide an accurate market rent. Given the 9.5% renter density in ZIP 23963, it's reasonable to infer that the market for rental properties, including those eligible for Section 8, is relatively modest. A lower renter density typically indicates less demand for rentals, which could influence market rents downward.
The Days on Market (DOM) figure is also not available, which is crucial for understanding how quickly properties are rented out. Without this information, we cannot fully assess the potential vacancy rates and their impact on the gross yield. However, based on the 9.5% renter density, it's likely that the market rent, if available, would not significantly exceed the Section 8 FMR, especially if the area has limited rental activity.
In conclusion, the Section 8 scenario provides a clear gross yield of about 10.7%, while the lack of market rent data makes it difficult to provide a precise comparison. Given the low renter density, the Section 8 gross yield appears to be a more reliable metric for investment consideration in ZIP 23963.
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.