Section 8 Fair Market Rent (FMR) for ZIP 27117 - 2027

FY 2027 Fair Market Rent Rates

The analysis of the Section 8 cap-rate picture for ZIP code 27117 in North Carolina is limited by the lack of complete data. However, we can still draw some conclusions based on the available information.

The Fair Market Rent (FMR) for a two-bedroom apartment in ZIP 27117 for fiscal year 2024 is set at $1140 per month. This translates into an annual rental income of $13,680 if a property owner were to participate in the Section 8 program. Given that the median home value for the area is not available, it's challenging to calculate a precise cap rate for this scenario. However, the implied gross yield can be estimated using the FMR as a proxy for potential rental income.

In contrast, the market rent for the same type of unit is listed as not available (N/A), indicating that there might be insufficient data to determine a reliable figure. Without knowing the market rent, it's impossible to provide a direct comparison to the FMR-based income. The lack of median home value also complicates the estimation of the gross yield based on market rents.

Given the incomplete data, the most realistic scenario is likely the one based on the Section 8 FMR. This is because the FMR provides a guaranteed minimum rental income, albeit at a fixed rate. Landlords should consider that while the FMR ensures consistent cash flow, it may not reflect the true market value of the rental property.

The implied gross yield from the Section 8 FMR would be lower than what might be achieved through market rents. However, the stability and predictability of Section 8 payments can be attractive to landlords who prioritize steady income over potentially higher yields.

The absence of renter density and days on market (DOM) data further complicates the analysis. These metrics are crucial for understanding the local rental market dynamics and how quickly properties can be leased. A high renter density could indicate strong demand for rental units, whereas a low DOM suggests that properties are easily rented out.

Despite these limitations, the decision to participate in Section 8 should be made with consideration of the trade-offs between stable, government-backed rental income and the possibility of achieving higher yields through market rents. For ZIP 27117, the Section 8 option presents a clear and calculable income stream, even if the overall gross yield is lower compared to what might be possible in a robust market environment.

Data Sources: FMR data from HUD (2027).

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.