Section 8 Fair Market Rent (FMR) for ZIP 28545 - 2027

FY 2027 Fair Market Rent Rates

The analysis for ZIP code 28545 in North Carolina focuses on deriving the Section 8 cap rate picture using the available Fair Market Rent (FMR) data. The annualized FMR for a 2-bedroom apartment in this ZIP code for FY 2024 is $1270. However, due to the lack of specific market rent data, we must rely solely on the FMR figure to infer potential gross yields.

To calculate the gross yield, we would typically divide the annual rental income by the property's value. For instance, if a median home value were known, we could use it to determine the gross yield. Given that the median home value is not provided, we can only consider the FMR to estimate a hypothetical gross yield. Assuming a median home value of $200,000 as a placeholder for illustrative purposes, the gross yield would be calculated as follows:

$1270 (annualized FMR) / $200,000 (median home value) = 0.635%, which implies a very low gross yield under Section 8. This calculation assumes that the entire property is rented out at the FMR rate, which is not always the case in practice.

In reality, the gross yield for properties participating in the Section 8 program in ZIP 28545 would likely be lower still, as the median home value is not specified and could be higher than our placeholder figure. Moreover, the absence of market rent data means we cannot compare the FMR yield to a typical market yield, which would usually be higher due to the non-subsidized nature of market rents.

The lack of specific data on renter density and days on market (DOM) further complicates the analysis. However, it's important to note that the FMR-based gross yield of 0.635% is indicative of a scenario where the property is fully subsidized through the Section 8 program. This yield is significantly lower than what might be expected in a market-driven rental situation, highlighting the trade-offs involved in accepting Section 8 tenants.

For landlords and small-portfolio investors considering participation in the Section 8 program in ZIP 28545, the decision should be made with an understanding of the low gross yield that comes with the stability and guaranteed payment structure of the program. While the exact market conditions and competition levels remain unclear without additional data, the FMR provides a baseline for assessing the financial implications of such a decision.

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.