Location: Columbia, SC | Metro: Columbia, 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 | $930 |
| 1 Bedroom | $1,050 |
| 2 Bedrooms | $1,150 |
| 3 Bedrooms | $1,470 |
| 4 Bedrooms | $1,720 |
| 5 Bedrooms | $1,995 |
| 6 Bedrooms | $2,234 |
| 7 Bedrooms | $2,413 |
| 8 Bedrooms | $2,534 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,150 | $121,796 | 0.94% | C |
| 3BR | $1,470 | $168,687 | 0.87% | C |
| 4BR | $1,720 | $223,799 | 0.77% | D |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 29123, located in Pelion, South Carolina, provides a detailed look at potential rental income versus property values. Using the annualized Fair Market Rent (FMR) for a 2-bedroom unit set at $1020 for fiscal year 2024, and the market rent of $969 based on the latest Census ACS data, we can derive the implied gross yields.
First, let's calculate the gross yield using the FMR. With an FMR of $1020 per month, the annual rent would be $12,240. Dividing this by the median home value of $158,503 gives us an implied gross yield of approximately 7.7%. This figure represents the expected return on investment if the property were rented out at the FMR rate.
Next, using the market rent of $969 per month, the annual rent would be $11,628. When this amount is divided by the median home value of $158,503, it results in an implied gross yield of about 7.3%. This calculation reflects the actual market conditions and what landlords might expect to receive from tenants without participating in the Section 8 program.
Given that only 20.3% of households in Pelion are renters, it suggests that the demand for rental properties, including those under the Section 8 program, is relatively low. The N/A-day DOM (days on market) indicates that there is no recent data available to determine how long it takes for rental properties to find tenants. However, this does not necessarily mean that finding a tenant would be difficult; it simply means that the data is incomplete.
Comparing the two gross yields, the FMR scenario offers a slightly higher return at 7.7%, whereas the market rent scenario provides a lower return at 7.3%. Landlords should consider these figures when deciding whether to participate in the Section 8 program. While the FMR rate ensures a stable income source, the market rent rate aligns more closely with current tenant demand.
In conclusion, the Section 8 cap rate for ZIP 29123 presents a modest return on investment. Landlords must weigh the benefits of guaranteed rental income against the potential challenges of lower tenant demand and program participation requirements. The choice between FMR and market rent rates should be made based on individual financial goals and risk tolerance.
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.