Location: Surry County, NC | Metro: Winston-Salem, NC HUD Metro FMR Area
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 | $830 |
| 1 Bedroom | $860 |
| 2 Bedrooms | $1,080 |
| 3 Bedrooms | $1,310 |
| 4 Bedrooms | $1,520 |
| 5 Bedrooms | $1,763 |
| 6 Bedrooms | $1,975 |
| 7 Bedrooms | $2,133 |
| 8 Bedrooms | $2,240 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,080 | $209,550 | 0.52% | F |
| 3BR | $1,310 | $292,332 | 0.45% | F |
| 4BR | $1,520 | $427,797 | 0.36% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 27041, Pilot Mountain, NC, reveals interesting insights into the potential returns for landlords and small-portfolio investors. To derive the cap-rate, we must first understand the gross yield from both the Fair Market Rent (FMR) and the market rent figures.
Based on the provided data, the annualized FMR for a two-bedroom apartment in ZIP 27041 for FY 2024 is $890. Using this figure, the implied gross yield for a property valued at $273,941 would be approximately 3.25%. This is calculated by multiplying the monthly FMR by 12 months and dividing by the median home value. The calculation is as follows:
In contrast, the Census ACS reports the market rent for a two-bedroom apartment in ZIP 27041 as $841 per month. Applying this to the median home value, the implied gross yield drops slightly to about 3.07%. Here's the calculation:
Given the 20.8% renter density in the area, it is important to note that the demand for rental properties is relatively low compared to owner-occupied homes. However, the FMR scenario, which reflects government-set rates for housing assistance, provides a higher gross yield. This makes it more attractive for landlords who qualify for Section 8 contracts.
The lack of data on days on market (DOM) suggests that there might be limited turnover in rental properties, indicating a stable but possibly less dynamic market. Despite this, the FMR scenario offers a better gross yield, making it a more realistic option for investors seeking to maximize returns within the constraints of the local rental market. Landlords should weigh these yields against their own operating costs to determine the net yield, but the gross yield comparison clearly favors the Section 8 route over the general market rent for ZIP 27041.
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.