Location: Staunton-Stuarts Draft, VA | Metro: Harrisonburg, 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 | $980 |
| 1 Bedroom | $990 |
| 2 Bedrooms | $1,190 |
| 3 Bedrooms | $1,630 |
| 4 Bedrooms | $1,920 |
| 5 Bedrooms | $2,227 |
| 6 Bedrooms | $2,494 |
| 7 Bedrooms | $2,694 |
| 8 Bedrooms | $2,829 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,190 | $239,749 | 0.5% | F |
| 3BR | $1,630 | $313,849 | 0.52% | F |
| 4BR | $1,920 | $362,411 | 0.53% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 24441, Grottoes, Virginia, reveals a mixed picture when comparing the federal monthly rental limit (FMR) to the market rent. The annualized FMR for a 2-bedroom property in this area for fiscal year 2024 is $1190 per month, while the market rent based on Census ACS data stands at $996 per month. Given the median home value of $307,447, these figures translate into distinct gross yields.
First, let's calculate the gross yield using the FMR. At $1190 per month, the annual income would be $14,280. This results in a gross yield of approximately 4.65% when divided by the median home value of $307,447. On the other hand, using the market rent of $996 per month, the annual income drops to $11,952, leading to a gross yield of about 3.89%.
The higher gross yield derived from the FMR scenario appears more attractive at first glance. However, it's important to consider the actual rental demand in the area. With a renter density of only 19.0%, there is limited demand for rental properties, which could affect the stability and sustainability of the higher rent. Additionally, the lack of data on the days on market (DOM) suggests that rental turnover might be slow, further impacting the feasibility of achieving the higher FMR-based rent consistently.
In conclusion, while the FMR provides a higher gross yield of 4.65%, the market rent-based gross yield of 3.89% is likely more realistic given the low renter density in Grottoes, Virginia. Landlords and small-portfolio investors should focus on the market rent scenario to ensure stable occupancy and reliable cash flow. The FMR can serve as a benchmark for maximum allowable rent under the program, but relying solely on it without considering local market conditions could lead to mismanagement of expectations.
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.