Location: Sumter, SC | Metro: Sumter, SC MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,200 |
| 1 Bedroom | $1,310 |
| 2 Bedrooms | $1,720 |
| 3 Bedrooms | $2,050 |
| 4 Bedrooms | $2,650 |
| 5 Bedrooms | $3,074 |
| 6 Bedrooms | $3,443 |
| 7 Bedrooms | $3,718 |
| 8 Bedrooms | $3,904 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 29152 reveals interesting dynamics between federally mandated rental rates and market-driven prices. The Fair Market Rent (FMR) for a 2-bedroom apartment in fiscal year 2024 is set at $1,580 annually, while the Census ACS reports the market rent at $1,429. Given these figures, let's calculate the implied gross yield for each scenario.
First, consider the FMR of $1,580. This figure represents the annualized rental income landlords can expect from Section 8 tenants. If we were to use this amount to estimate a property's value based on typical rental yields, we would find that it implies a relatively low gross yield. For instance, if a property in this area was valued at $158,000 (a common valuation based on rental income), the gross yield would be approximately 1%. However, since the median home value is not available, this calculation is speculative and should be interpreted cautiously.
Second, using the market rent of $1,429, the implied gross yield would similarly be low, assuming a property value of around $142,900. This would also result in a gross yield of roughly 1%. Both scenarios indicate that the gross yield is significantly lower than what might be expected in a typical investment property, where yields often range from 3% to 6%.
The high renter density of 99.5% suggests that there is strong demand for rental properties in this area, which could support higher rental incomes. However, the lack of specific median home values and days on market (DOM) data makes it challenging to provide a precise cap-rate figure. Despite this, the comparison between the FMR and market rent indicates that the actual rental income may be slightly less than the FMR, aligning more closely with the market rent of $1,429.
In conclusion, the gross yield derived from both the FMR and market rent figures is quite low, suggesting that the potential returns on investment properties in ZIP 29152, especially those participating in the Section 8 program, are modest. Investors should carefully consider these figures when evaluating the profitability of their investments in this area. The high renter density supports the idea that rental income is stable, but the low gross yield means that other factors such as tax benefits or government subsidies must be considered to improve overall investment attractiveness.
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.