Section 8 Fair Market Rent (FMR) for ZIP 28221 - 2027

FY 2027 Fair Market Rent Rates

The analysis of the Section 8 cap-rate for ZIP code 28221 reveals several key points that are crucial for landlords and small-portfolio investors.

The Fair Market Rent (FMR) for a two-bedroom apartment in ZIP 28221 for fiscal year 2024 is set at $1650 per month. This figure represents the annualized income potential for a property under the Section 8 program. However, without the median home value, it's impossible to calculate an exact cap rate. Instead, we can discuss the implied gross yield based on the FMR.

In the scenario where the median home value is known, the implied gross yield would be calculated by dividing the annualized FMR by the median home value. For instance, if the median home value were hypothetically $250,000, the gross yield would be 7.92% ($1650 * 12 / $250,000). This calculation assumes the property is valued at the median home value and rented out at the FMR.

However, since the market rent is listed as N/A, it's also important to consider what the actual gross yield might look like if market rents were available. The difference between the FMR and market rent can significantly impact the gross yield and thus the attractiveness of the property to investors.

The N/A% renter density and N/A-day Days on Market (DOM) indicate a lack of specific data to provide a precise comparison. Generally, higher renter density and lower DOM suggest a stronger rental market, which could mean that market rents might be higher than the FMR. Conversely, if the DOM is high, it suggests a slower market, possibly making the FMR a more accurate reflection of rental income potential.

Given the current data, the most realistic scenario for gross yield is likely tied to the FMR unless market rent data becomes available. Investors should use the FMR as a baseline for their calculations and consider the potential for higher yields if market rents exceed the FMR.

To conclude, while the exact cap rate cannot be determined due to missing data on median home value and market rent, the implied gross yield based on the FMR provides a useful starting point for investment analysis. Landlords and small-portfolio investors should also factor in the local rental market dynamics to refine their projections.

Data Sources: FMR data from HUD (2027).

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.