Location: Raleigh County, WV | Metro: Raleigh County, WV HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $750 |
| 1 Bedroom | $760 |
| 2 Bedrooms | $970 |
| 3 Bedrooms | $1,340 |
| 4 Bedrooms | $1,400 |
| 5 Bedrooms | $1,624 |
| 6 Bedrooms | $1,819 |
| 7 Bedrooms | $1,965 |
| 8 Bedrooms | $2,063 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 25836 presents a unique challenge due to the limited data available. The Fair Market Rent (FMR) for a two-bedroom apartment in this area for fiscal year 2024 is set at $960 per month. However, the median home value and market rent for the same area are not available, making it difficult to provide a comprehensive analysis.
To derive a rough cap-rate picture, we must first understand that the cap rate is calculated as the net operating income (NOI) divided by the property's value. In the context of Section 8 properties, the focus is often on the gross yield, which is the annual rental income divided by the property's value. Given the FMR of $960 per month, the annualized rent would be $11,520 for a two-bedroom unit.
Assuming the median home value were known, the implied gross-yield could be calculated. For example, if the median home value were $150,000, the gross-yield would be approximately 7.7% ($11,520 / $150,000). This figure provides a baseline for understanding potential returns under Section 8 contracts.
The lack of market rent data makes it impossible to compare the gross-yield between Section 8 and market rents directly. However, the 9.0% renter density in ZIP 25836 suggests a relatively low demand for rental housing compared to other areas. This could indicate that market rents might be lower than expected, potentially bringing them closer to the Section 8 rates.
Additionally, the Days on Market (DOM) data is also not available, which typically helps gauge how quickly properties are rented out. Without this information, it's challenging to assess the liquidity of rental investments in this area.
In conclusion, while the exact cap-rate cannot be determined without the median home value and market rent figures, the implied gross-yield based on the FMR can give investors an idea of potential returns. The low renter density in ZIP 25836 suggests that market rents may not significantly exceed Section 8 rates, making the latter a more realistic scenario for gross-yield comparisons.
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.