Location: Roanoke, VA | Metro: Lynchburg, VA MSA
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 | $1,020 |
| 1 Bedroom | $1,060 |
| 2 Bedrooms | $1,240 |
| 3 Bedrooms | $1,710 |
| 4 Bedrooms | $2,020 |
| 5 Bedrooms | $2,343 |
| 6 Bedrooms | $2,624 |
| 7 Bedrooms | $2,834 |
| 8 Bedrooms | $2,976 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,240 | $207,120 | 0.6% | F |
| 3BR | $1,710 | $281,617 | 0.61% | D |
| 4BR | $2,020 | $343,807 | 0.59% | F |
| 5BR | $2,343 | $399,125 | 0.59% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP 24179, Vinton, VA, provides a clear picture of potential investment returns. To calculate the cap rate, we first need to determine the annualized rental income and compare it to the median home value.
The Fair Market Rent (FMR) for a two-bedroom apartment in ZIP 24179 for fiscal year 2024 is set at $1000 per month. This translates to an annual rental income of $12,000. The median home value in the area is $284,352. Using these figures, the implied gross yield for a property receiving Section 8 payments would be approximately 4.22%. This is calculated by dividing the annual rental income ($12,000) by the median home value ($284,352).
In contrast, the market rent for a similar two-bedroom property is reported at $944 per month according to the Census ACS data. This equates to an annual rental income of $11,328. When compared to the median home value of $284,352, the implied gross yield based on market rent is about 3.98%. This figure is derived by dividing the annual market rent ($11,328) by the median home value ($284,352).
Given the 25.1% renter density in Vinton, VA, it is important to note that a significant portion of the population may prefer homeownership over renting. However, the N/A-day Days on Market (DOM) suggests that there is either a lack of data or a high turnover rate in rental properties, which could indicate strong demand for rental units, particularly those that qualify for Section 8 subsidies.
The gross yield comparison between the Section 8 scenario and the market rent scenario reveals a higher yield for properties participating in the Section 8 program. At 4.22%, the Section 8 scenario offers a more attractive gross yield than the market rent scenario, which stands at 3.98%. For landlords and small-portfolio investors, this means that properties in ZIP 24179 receiving Section 8 payments can potentially generate slightly better cash flow relative to their value.
However, the decision to participate in the Section 8 program should also consider other factors such as tenant screening processes, compliance requirements, and the stability of rental income. Given the data, the Section 8 scenario is more likely to provide a stable and predictable income stream, making it a viable option for investors seeking consistent returns.
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.