Location: Charlotte-Concord-Gastonia, NC | Metro: Charlotte-Concord-Gastonia, NC-SC 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 | $1,390 |
| 1 Bedroom | $1,450 |
| 2 Bedrooms | $1,580 |
| 3 Bedrooms | $1,930 |
| 4 Bedrooms | $2,450 |
| 5 Bedrooms | $2,842 |
| 6 Bedrooms | $3,183 |
| 7 Bedrooms | $3,438 |
| 8 Bedrooms | $3,610 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,580 | $259,224 | 0.61% | D |
| 3BR | $1,930 | $358,760 | 0.54% | F |
| 4BR | $2,450 | $416,586 | 0.59% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 28206 in Charlotte, NC, reveals interesting insights into potential investment opportunities. To derive the gross yield, we use the Fair Market Rent (FMR) and Zillow's Observed Rent Index (ZORI) figures for a two-bedroom apartment. The annualized FMR for a 2BR unit is $1300 per month, equating to $15,600 annually. Meanwhile, the ZORI market rent stands at $1,572 monthly, or $18,864 yearly.
Given the median home value of $325,382 in this area, let's calculate the gross yields. For the FMR scenario, the gross yield is approximately 4.8%. This calculation is derived by dividing the annual rental income ($15,600) by the property value ($325,382). In contrast, the market rent scenario yields a gross return of about 5.8%, calculated by dividing the annual market rent ($18,864) by the median home value.
The gross yield comparison shows that the market rent scenario provides a higher return compared to the FMR scenario. However, considering the 67.1% renter density in ZIP 28206, it's important to note that while the market rent offers a better gross yield, the reality of securing long-term tenants through the Section 8 program might lean towards the lower FMR figure. The lack of data on days-on-market (DOM) makes it difficult to assess how quickly properties can be leased under either scenario. Nevertheless, the higher gross yield from market rent suggests greater financial flexibility and potential profitability if the property can be rented at this rate consistently.
Investors should weigh these figures carefully, taking into account the specifics of the Section 8 program, such as the likelihood of tenant turnover and the administrative requirements of participating in the program. Despite the higher gross yield from market rent, the stability provided by the Section 8 program could make the lower FMR figure more attractive to some investors.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.