Location: Granville County, NC | Metro: Raleigh-Cary, NC MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,060 |
| 1 Bedroom | $1,080 |
| 2 Bedrooms | $1,220 |
| 3 Bedrooms | $1,500 |
| 4 Bedrooms | $1,980 |
| 5 Bedrooms | $2,297 |
| 6 Bedrooms | $2,573 |
| 7 Bedrooms | $2,779 |
| 8 Bedrooms | $2,918 |
U.S. Census Bureau data (2024)
To determine if a landlord should invest in ZIP 27525 (Franklinton, NC) for Section 8 properties, follow this decision tree:
1) Does FMR ($1280) clear debt service on a $356,151 property?
No. The Fair Market Rent (FMR) of $1280 is insufficient to cover the typical debt service costs on a property valued at $356,151. Debt service typically includes mortgage payments, property taxes, insurance, and maintenance costs. With an average property value that high, it's unlikely that the rental income would meet these financial obligations.
2) Is market rent ($1,850 ZORI) above, at, or below FMR?
Above. The market rent of $1,850 is higher than the FMR of $1280, indicating that there is potential for landlords to charge more than the Section 8 rate. This suggests that non-Section 8 tenants could be a viable option, but it also means that Section 8 tenants might struggle to find affordable housing in this area.
3) Are 16.7% renters + 19-day DOM enough demand?
It depends. In ZIP 27525, 16.7% of residents are renters, which is a moderate level of rental demand. Additionally, the days on market (DOM) for rental properties is 19 days, indicating a relatively quick turnover. However, the suitability of this demand level for Section 8 investment hinges on the willingness of local Section 8 tenants to move into the area and the competition from other landlords who might prefer non-Section 8 tenants due to the higher market rent rates.
In conclusion, ZIP 27525 presents challenges for Section 8 investment due to the low FMR relative to property values. While the market rent is attractive, it doesn't align well with the financial goals of Section 8 landlords. The rental demand is present but may not sufficiently support Section 8 units given the higher market rents. Landlords must weigh these factors carefully before making an investment decision.
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.