Location: Patrick County, VA | Metro: Patrick County, VA
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $760 |
| 1 Bedroom | $760 |
| 2 Bedrooms | $940 |
| 3 Bedrooms | $1,210 |
| 4 Bedrooms | $1,460 |
| 5 Bedrooms | $1,694 |
| 6 Bedrooms | $1,897 |
| 7 Bedrooms | $2,049 |
| 8 Bedrooms | $2,151 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,210 | $238,626 | 0.51% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 24171 reveals a nuanced investment landscape. To begin with, let's consider the annualized Fair Market Rent (FMR) for a 2-bedroom apartment, which is set at $910 per month for fiscal year 2026, based on metro area standards. This translates into an annual rental income of $10,920. When we compare this to the median home value of $188,228, the implied gross yield for a property leased under the Section 8 program is approximately 5.8%. This is calculated by dividing the annual rental income ($10,920) by the median home value ($188,228).
Next, let's look at the market rent scenario. The Census ACS data indicates a market rent of $687 per month for a 2-bedroom apartment. This amounts to an annual rental income of $8,244. Using the same median home value of $188,228, the implied gross yield in this case is around 4.4%, calculated by dividing the annual market rent ($8,244) by the median home value ($188,228).
The gross yield comparison between the two scenarios shows that the Section 8 program offers a higher yield of 5.8% compared to the market rent yield of 4.4%. However, the decision on which scenario is more realistic hinges on several factors, including the local rental market dynamics and the preferences of potential tenants.
ZIP code 24171 has a renter density of 26.8%, indicating that a significant portion of residents are homeowners rather than renters. This lower renter density might suggest that the market rent scenario could be more reflective of the actual demand for rental properties in the area. Additionally, the lack of data on days on market (DOM) makes it difficult to gauge how quickly a property might be rented out under either program. Nevertheless, the higher yield from the Section 8 program is attractive, especially if the goal is to secure long-term, stable rental income.
In conclusion, while the Section 8 program offers a higher gross yield of 5.8%, the market rent scenario with a yield of 4.4% may better align with the realities of the local rental market, considering the relatively low renter density. Investors should carefully weigh these factors when making their investment decisions.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.