Location: Durham-Chapel Hill, NC | Metro: Durham-Chapel Hill, 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 | $1,420 |
| 1 Bedroom | $1,480 |
| 2 Bedrooms | $1,660 |
| 3 Bedrooms | $2,060 |
| 4 Bedrooms | $2,370 |
| 5 Bedrooms | $2,749 |
| 6 Bedrooms | $3,079 |
| 7 Bedrooms | $3,325 |
| 8 Bedrooms | $3,491 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,480 | $199,393 | 0.74% | D |
| 2BR | $1,660 | $251,968 | 0.66% | D |
| 3BR | $2,060 | $304,990 | 0.68% | D |
| 4BR | $2,370 | $372,404 | 0.64% | D |
| 5BR | $2,749 | $414,898 | 0.66% | D |
U.S. Census Bureau data (2024)
The classification of ZIP 27704 in Durham, NC, hinges on the balance between yield and stability. With a Fair Market Rent (FMR) of $1,520 for fiscal year 2024, compared to the market rent of $1,708, the area offers a decent yield potential for landlords. However, the median home value at $310,692 indicates a significant upfront investment.
On the stability front, the rental market is robust with 39.3% of residents being renters. The average Days on Market (DOM) stands at 44 days, suggesting a relatively quick turnaround for properties once they are listed. Additionally, the median household income of $69,668 provides a solid financial base for tenants, reducing the risk of default.
Evaluating these factors, ZIP 27704 leans towards being a steady-cashflow zone. The FMR is slightly below the market rent, indicating that while there's room for profit, it isn't a high-yield environment where substantial returns can be expected above market rates. Instead, the combination of a sizeable rental population and a reasonable DOM suggests a stable and predictable cash flow for landlords.
Furthermore, the median income supports the ability of tenants to pay rent consistently, which is crucial for maintaining steady cash flows. While the upfront costs of purchasing a property in this ZIP code are considerable, the ongoing rental income is reliable due to the local economic conditions and housing demand.
To summarize, the yield is moderate, driven by the FMR being lower than the market rent but still providing a positive return. Stability is high, supported by a significant portion of the population renting, quick property turnover, and a healthy median income level. Therefore, this area is best suited for investors looking for consistent, long-term rental income rather than those seeking rapid appreciation or high-yield opportunities.
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.