Location: Bath County, VA | Metro: Roanoke, VA HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $910 |
| 1 Bedroom | $950 |
| 2 Bedrooms | $1,130 |
| 3 Bedrooms | $1,570 |
| 4 Bedrooms | $1,900 |
| 5 Bedrooms | $2,204 |
| 6 Bedrooms | $2,468 |
| 7 Bedrooms | $2,665 |
| 8 Bedrooms | $2,798 |
U.S. Census Bureau data (2024)
A decision to invest in ZIP 24422 (Clifton Forge, VA) for Section 8 properties hinges on three key questions.
1. Does the Fair Market Rent (FMR) of $910 cover the debt service on a $140,250 property?
Yes: The FMR of $910 is likely sufficient to cover the debt service on a property valued at $140,250. Assuming a typical mortgage rate of around 4%, the annual debt service would be approximately $8,400, which is well within the reach of the $910 monthly FMR.
No: This scenario is unlikely given the FMR and typical debt service costs for a property of that value. However, if the debt service exceeds the FMR, investment would not be advisable under these conditions.
2. How does the market rent of $678 compare to the FMR?
Market rent is below FMR: At $678, the market rent is below the FMR of $910. This suggests that Section 8 tenants can afford to pay the higher FMR, making it a favorable investment. Landlords will not face significant competition from non-subsidized rentals, enhancing the attractiveness of the area for Section 8 investments.
Market rent is equal to or above FMR: If the market rent were to rise and match or exceed the FMR, the investment would become less attractive because the subsidy would offer little to no competitive advantage over market rates. However, based on the current data, this is not the case.
3. Is there enough demand with 26.5% renters and an unknown number of days on the market (DOM)?
It depends: With 26.5% of residents renting, there is a moderate level of demand for rental properties. The lack of data on days on the market makes it difficult to assess how quickly properties are rented out. However, the presence of Section 8 tenants who can pay up to $910 per month indicates a stable source of demand. Landlords should consider the stability of the local economy and the presence of institutions such as schools or government facilities that might support a steady flow of renters.
In conclusion, if the debt service is covered by the FMR and market rents remain below the FMR, ZIP 24422 presents a reasonable opportunity for Section 8 investments. The moderate demand from renters supports this, but landlords must also factor in the unknown days on the market and the overall economic stability of the area.
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.