Location: Mecklenburg County, VA | Metro: Halifax County, VA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,160 |
| 1 Bedroom | $1,180 |
| 2 Bedrooms | $1,370 |
| 3 Bedrooms | $1,790 |
| 4 Bedrooms | $2,140 |
| 5 Bedrooms | $2,482 |
| 6 Bedrooms | $2,780 |
| 7 Bedrooms | $3,002 |
| 8 Bedrooms | $3,152 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 24598 provides a clear picture of potential investment yields. For the purposes of this analysis, we'll focus on the 2-bedroom Fair Market Rent (FMR) and market rent figures.
The annualized 2BR FMR for FY 2026 in the metro area is $1,060. This translates into an annual rental income of $12,720 per unit. Given that the median home value is not available, we must rely on other metrics to assess the gross yield. The 18.9% renter density suggests a moderate demand for rental properties, but without the median home value, it's challenging to determine the exact purchase price of a property.
However, using the market rent figure of $1,388, the annual rental income would be $16,656 per unit. This higher income level implies a better gross yield compared to the FMR scenario. But the true cap rate can only be calculated if we know the median home value or the typical purchase price for homes in this ZIP code.
To provide a more concrete comparison, let's assume a hypothetical median home value. If the median home value were, for example, $200,000, the gross yield based on the FMR would be 6.36% ($12,720 / $200,000), while the gross yield based on the market rent would be 8.33% ($16,656 / $200,000).
Given the limited data, the market rent scenario appears more realistic. It reflects what tenants are willing to pay, which is likely to be higher than the government-set FMR. The 18.9% renter density indicates that there is a sufficient number of potential tenants to fill units, making the higher market rent scenario plausible.
The days on market (DOM) being not available means we cannot assess how quickly properties are sold. However, a higher gross yield, as seen in the market rent scenario, generally attracts more interest from investors and could lead to faster sales. Landlords should aim for the market rent to maximize their returns on investment.
In conclusion, while the exact cap rate cannot be determined without the median home value, the gross yield derived from the market rent of $1,388 is significantly higher at 8.33%, compared to the 6.36% from the FMR of $1,060. This makes the market rent scenario more attractive for investment purposes.
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.