Location: Virginia Beach-Norfolk-Newport News, VA | Metro: Virginia Beach-Norfolk-Newport News, VA-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 | $1,400 |
| 1 Bedroom | $1,420 |
| 2 Bedrooms | $1,610 |
| 3 Bedrooms | $2,230 |
| 4 Bedrooms | $2,620 |
| 5 Bedrooms | $3,039 |
| 6 Bedrooms | $3,404 |
| 7 Bedrooms | $3,676 |
| 8 Bedrooms | $3,860 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,610 | $380,323 | 0.42% | F |
| 3BR | $2,230 | $548,664 | 0.41% | F |
| 4BR | $2,620 | $720,427 | 0.36% | F |
| 5BR | $3,039 | $1,157,934 | 0.26% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 27927 in North Carolina provides insight into potential investment opportunities. With a median home value of $884,364, let's consider two scenarios: the annualized Fair Market Rent (FMR) for a 2-bedroom unit at $1380 and the market rent, which is currently not available.
In the first scenario, using the annualized FMR, the potential rental income would be $1380 multiplied by 12 months, totaling $16,560 per year. This figure represents the maximum allowable rent for a Section 8 tenant. To calculate the implied gross yield, we divide the annual rental income by the median home value. In this case, the gross yield is approximately 1.87%. This calculation assumes that the property can be rented out at the FMR rate, which is unlikely given the high median home value and low renter density of 10.0%.
Moving to the second scenario where the market rent is not available, it's important to note that the actual market rent could be significantly higher than the FMR. However, without specific market rent data, we cannot provide an exact gross yield. Given the context of a high median home value and low renter density, it's reasonable to assume that the actual market rent would be higher than the FMR, leading to a higher gross yield.
The 52-day Days on Market (DOM) indicates that properties in this area take about 52 days to sell once listed, suggesting a relatively slow-moving market. This factor, combined with the low renter density, makes it challenging to achieve a high occupancy rate, especially if the property is priced at or near the median home value.
The FMR-based gross yield of 1.87% is not representative of the true potential in ZIP 27927 due to the significant gap between the median home value and the FMR. Landlords and small-portfolio investors should focus on understanding the local market rent to get a clearer picture of the gross yield. The actual gross yield based on market rent is likely to be more realistic and beneficial for investment decision-making.
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.