Location: Raleigh-Cary, NC | Metro: Raleigh-Cary, NC 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 | $1,540 |
| 1 Bedroom | $1,610 |
| 2 Bedrooms | $1,750 |
| 3 Bedrooms | $2,180 |
| 4 Bedrooms | $2,930 |
| 5 Bedrooms | $3,399 |
| 6 Bedrooms | $3,807 |
| 7 Bedrooms | $4,112 |
| 8 Bedrooms | $4,318 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,750 | $282,915 | 0.62% | D |
| 3BR | $2,180 | $392,589 | 0.56% | F |
| 4BR | $2,930 | $752,757 | 0.39% | F |
| 5BR | $3,399 | $985,755 | 0.34% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 27614 in Raleigh, NC, reveals some interesting insights. To begin with, let's look at the Fair Market Rent (FMR) for a two-bedroom apartment, which stands at $1810 annually for fiscal year 2024. This translates into a monthly rental income of approximately $150.83. When compared to the median home value of $685,519, the implied gross yield for a Section 8 property in this scenario is about 2.20%. The calculation is straightforward: ($150.83 * 12) / $685,519 = 2.20%.
On the other hand, the market rent for a two-bedroom apartment, based on the Zillow Observed Rent Index (ZORI), is $1,516 per month. This gives an annual rental income of $18,192. Using the same median home value, the implied gross yield for a market-rent property is significantly higher at around 2.65%. The calculation here is ($1,516 * 12) / $685,519 = 2.65%.
Given the 29.0% renter density in ZIP 27614, it is important to note that while the market rent scenario offers a better gross yield, the reality of finding tenants willing to pay market rates might be challenging. The average days on market (DOM) of 21 days suggests that properties can be leased relatively quickly, but this does not necessarily reflect the ease of finding market-rate tenants.
In terms of which scenario is more realistic, the Section 8 scenario with a gross yield of 2.20% seems more practical due to the lower renter density. However, the slightly higher gross yield of 2.65% offered by the market rent scenario is still attractive and could be feasible if the property is well-maintained and located in a desirable area. Landlords and small-portfolio investors should weigh these factors carefully when deciding whether to participate in the Section 8 program or aim for market rents.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.