Location: Roanoke, VA | Metro: Roanoke, VA HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,120 |
| 1 Bedroom | $1,180 |
| 2 Bedrooms | $1,380 |
| 3 Bedrooms | $1,910 |
| 4 Bedrooms | $2,310 |
| 5 Bedrooms | $2,680 |
| 6 Bedrooms | $3,002 |
| 7 Bedrooms | $3,242 |
| 8 Bedrooms | $3,404 |
The analysis of the Section 8 cap rate for ZIP code 24130 in Virginia reveals some critical insights into the investment potential for landlords and small-portfolio investors.
To begin, let's consider the annualized Fair Market Rent (FMR) for a two-bedroom unit, which is set at $1060 per month for fiscal year 2024. This translates to an annual rental income of $12,720. However, without a specific median home value for ZIP 24130, it's challenging to provide an exact gross yield. The gross yield is calculated by dividing the annual rental income by the property value. For example, if the median home value were $200,000, the implied gross yield would be 6.36%. But since the median home value is not available, we can only discuss the implications based on the FMR.
Given that the market rent for the area is also not available, it's difficult to compare the gross yields between market rents and Section 8 rents. Typically, market rents tend to be higher than Section 8 rates, which means that the gross yield for market rents would likely be higher than the 6.36% implied from the FMR alone. The lack of market rent data suggests that either the market is underdeveloped or there isn't enough information to draw a conclusion about the comparative advantage of Section 8 versus market rents.
Regarding the renter density, the absence of specific data points makes it impossible to quantify the percentage of renters in the area. However, understanding the local rental market dynamics is crucial for any landlord or investor considering Section 8 participation. High renter density might indicate a robust demand for rentals, potentially supporting higher occupancy rates even with Section 8 tenants.
The Days on Market (DOM) figure is also not provided, which is another key metric for assessing how quickly properties are rented out. A lower DOM indicates a faster turnover, which is generally favorable for rental investments. Without this information, it's hard to gauge the efficiency of the rental process in ZIP 24130.
In summary, while the FMR provides a baseline for expected rental income at $1060 per month for a two-bedroom unit, the lack of median home value and market rent data prevents a precise gross yield calculation. Investors should focus on obtaining detailed local market data to make informed decisions regarding Section 8 participation. The comparative advantage of market rents over Section 8 rates remains uncertain due to incomplete data, but typically, market rents offer a higher gross yield.
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.