Location: Winchester, VA | Metro: Winchester, VA-WV 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 | $1,020 |
| 1 Bedroom | $1,130 |
| 2 Bedrooms | $1,420 |
| 3 Bedrooms | $1,770 |
| 4 Bedrooms | $2,380 |
| 5 Bedrooms | $2,761 |
| 6 Bedrooms | $3,092 |
| 7 Bedrooms | $3,339 |
| 8 Bedrooms | $3,506 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,770 | $255,084 | 0.69% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 26722 provides a clear picture of potential rental income versus median home values. With the Fair Market Rent (FMR) for a two-bedroom apartment set at $1,110 annually (for FY 2024), and the market rent at $1,263 according to the Census ACS, we can calculate the implied gross yield for both scenarios.
Using the median home value of $200,367, the annualized FMR of $1,110 translates to an implied gross yield of approximately 0.55%. This calculation is straightforward: divide the annual rental income by the median home value. In contrast, the market rent of $1,263 annually yields a slightly higher gross yield of about 0.63%. These figures provide a baseline for understanding the financial returns landlords might expect from properties in this area under the Section 8 program versus market conditions.
Given that only 21.2% of the residents in ZIP 26722 are renters, it's important to consider the broader housing market dynamics. The low renter density suggests that a significant portion of the population owns their homes, which could affect the demand for rental properties. However, the lack of specific data on days on market (DOM) makes it challenging to assess how quickly rental units might be filled, especially under the Section 8 program.
The higher gross yield based on market rent ($1,263) is more realistic when considering the overall rental market in ZIP 26722. While the Section 8 program offers stability and guaranteed income, the lower gross yield (0.55%) reflects the limitations imposed by government-set rates. Investors should weigh the benefits of steady income against the potential for higher yields through market-based rentals.
To summarize, the implied gross yields for two-bedroom apartments in ZIP 26722 are 0.55% under the Section 8 program and 0.63% based on market rents. The higher market rent yield aligns better with the local rental market conditions, despite the relatively low renter density. This analysis helps landlords and small-portfolio investors understand the financial landscape they're entering.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.