Location: Charleston, WV | Metro: Charleston, WV HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $730 |
| 1 Bedroom | $850 |
| 2 Bedrooms | $1,050 |
| 3 Bedrooms | $1,330 |
| 4 Bedrooms | $1,380 |
| 5 Bedrooms | $1,601 |
| 6 Bedrooms | $1,793 |
| 7 Bedrooms | $1,936 |
| 8 Bedrooms | $2,033 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 25302 in Charleston, WV, reveals key insights into potential investment opportunities. For a two-bedroom property, the Fair Market Rent (FMR) for FY 2024 is set at $940 per month. This translates to an annualized rental income of $11,280. The Zillow Observed Rental Index (ZORI) indicates a market rent of $1,150 per month, which annualizes to $13,800.
Given the median home value in the area is $107,774, we can calculate the implied gross yield for both scenarios. Using the FMR, the gross yield would be approximately 10.47%, calculated as follows: ($11,280 / $107,774) * 100 = 10.47%. In contrast, using the ZORI, the gross yield increases to about 12.80%, calculated as: ($13,800 / $107,774) * 100 = 12.80%.
The higher gross yield based on ZORI suggests a potentially more lucrative investment scenario compared to relying solely on the FMR. However, considering the local market conditions, it's important to note that the renter density stands at 35.1%. This implies that nearly one-third of the population rents their homes, which could influence the demand for Section 8 properties. Additionally, the days on market (DOM) is listed as N/A, indicating incomplete data or that listings may not be representative of typical market activity.
While the ZORI-based gross yield appears more attractive, the actual achievable yield may be closer to the FMR-based figure due to the specific nature of Section 8 properties. These properties must meet certain criteria and face competition from other subsidized housing options, making the $940 FMR a more realistic starting point for calculating potential returns. Nonetheless, the market dynamics suggest that there is room for negotiation and potential upside if market rents can be achieved.
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.