Location: Fayetteville, NC | Metro: Fayetteville, NC HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $990 |
| 1 Bedroom | $1,010 |
| 2 Bedrooms | $1,130 |
| 3 Bedrooms | $1,510 |
| 4 Bedrooms | $1,870 |
| 5 Bedrooms | $2,169 |
| 6 Bedrooms | $2,429 |
| 7 Bedrooms | $2,623 |
| 8 Bedrooms | $2,754 |
U.S. Census Bureau data (2024)
The Section 8 analysis for ZIP code 28342 reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent. The FMR for the area, as set by HUD for fiscal year 2024, is $1000. However, the market rent data is currently unavailable, which makes it challenging to provide an exact percentage gap. Despite this lack of data, we can still draw valuable conclusions based on the existing information.
In ZIP 28342, only 0.0% of the population are renters, indicating a very low demand for rental properties. This statistic alone suggests that landlords and small-portfolio investors should be cautious about relying solely on the rental market for income. Additionally, the median home value is not available, but the median household income stands at $138,125. This high median income could imply that homeownership is more prevalent and affordable in the area, further reducing the number of potential rental tenants.
If the FMR of $1000 is higher than the current market rent, then accepting Section 8 tenants becomes a strategic yield play. Landlords would be able to secure a steady stream of income at rates above what they might otherwise receive from non-voucher tenants. This scenario benefits investors looking to maximize their returns in a low-rent environment.
Conversely, if the FMR is lower than the market rent, landlords who accept Section 8 vouchers will be offering housing below open-market rates. This situation could result in reduced profitability per unit, but it also ensures a stable tenant base with guaranteed payments through the voucher program. For investors focused on long-term stability rather than immediate high yields, this could still be a viable option.
The key takeaway for investors is to understand the dynamics of the local rental market. Given the high median income and low percentage of renters, there may be limited competition for rental units. Therefore, the decision to participate in the Section 8 program should be made based on the specific goals of the investment portfolio—whether it's maximizing short-term yield or ensuring long-term occupancy and payment reliability.
Data Sources: FMR data from HUD (2027). 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.