Location: Russell County, VA | Metro: Kingsport-Bristol, TN-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 | $810 |
| 1 Bedroom | $900 |
| 2 Bedrooms | $1,160 |
| 3 Bedrooms | $1,460 |
| 4 Bedrooms | $1,560 |
| 5 Bedrooms | $1,810 |
| 6 Bedrooms | $2,027 |
| 7 Bedrooms | $2,189 |
| 8 Bedrooms | $2,298 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,160 | $134,084 | 0.87% | C |
| 3BR | $1,460 | $207,439 | 0.7% | D |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP 24271, Nickelsville, VA, provides insights into potential investment yields under different rental scenarios. The Fair Market Rent (FMR) for a two-bedroom apartment in FY 2024 is set at $910 per month, while the market rent based on Census ACS data is $722 per month. Using these figures, we can calculate the implied gross yield for each scenario.
First, let's annualize the rents. For the FMR scenario, the annual rent would be $910 multiplied by 12 months, totaling $10,920. Dividing this by the median home value of $179,807 gives an implied gross yield of approximately 6.07%. This means that if a property were rented out at the FMR, it would generate a gross income equivalent to 6.07% of its value annually.
In contrast, using the market rent of $722 per month, the annual rent would be $8,664. When this amount is divided by the median home value of $179,807, the implied gross yield drops to about 4.82%. This lower figure reflects the actual market conditions and what tenants might pay without the assistance of Section 8 subsidies.
The gross yield comparison clearly shows that renting at the FMR offers a higher return compared to market rent. However, the decision on which scenario is more realistic hinges on several factors. In ZIP 24271, the renter density stands at 16.4%, indicating a relatively low proportion of residents who are likely to seek rental housing. Given this context, landlords might find it challenging to attract tenants willing to pay the FMR without government assistance.
Additionally, the N/A-day Days on Market (DOM) suggests that there is limited data available regarding how quickly properties are rented out, which could imply either a very stable market where vacancies are rare or a less active market where properties take longer to lease. Without precise DOM data, it's difficult to gauge the likelihood of achieving the higher FMR rent consistently.
Considering these points, the market rent scenario appears more practical for most landlords and small-portfolio investors. While the FMR scenario offers a higher gross yield, the lower renter density and uncertain DOM data suggest that securing long-term tenancies at those rates might be problematic. Therefore, aiming for the market rent of $722 per month, with an implied gross yield of 4.82%, is a safer and more realistic approach for generating steady rental income in Nickelsville, VA.
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.