Location: Charleston-North Charleston, SC | Metro: Charleston-North Charleston, SC MSA
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 | $1,430 |
| 1 Bedroom | $1,490 |
| 2 Bedrooms | $1,620 |
| 3 Bedrooms | $2,010 |
| 4 Bedrooms | $2,310 |
| 5 Bedrooms | $2,680 |
| 6 Bedrooms | $3,002 |
| 7 Bedrooms | $3,242 |
| 8 Bedrooms | $3,404 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,620 | $196,749 | 0.82% | C |
| 3BR | $2,010 | $307,251 | 0.65% | D |
| 4BR | $2,310 | $376,464 | 0.61% | D |
| 5BR | $2,680 | $458,173 | 0.58% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate scenario for ZIP 29418, North Charleston, SC, reveals a significant difference between the federally determined Fair Market Rent (FMR) and the local market rents. For a two-bedroom unit, the annualized FMR for fiscal year 2024 is $1420, while the local Zillow Observed Rent Index (ZORI) stands at $1775 per month.
Using these figures, we can calculate the implied gross yield for both scenarios. The gross yield is derived by dividing the annual rental income by the median home value, which in this case is $297,259.
For the FMR scenario, the annual rental income would be $1420 * 12 = $17,040. Dividing this by the median home value gives us an implied gross yield of approximately 5.73%. This is calculated as follows:
In contrast, using the ZORI figure, the annual rental income would be $1775 * 12 = $21,300. The implied gross yield here is approximately 7.17%, calculated as:
The disparity between the FMR and ZORI gross yields highlights the potential limitations of relying solely on government-set rental rates for investment decisions. Given that 45.0% of the residents in ZIP 29418 are renters, it's important to consider the local market dynamics. While the FMR provides a baseline for subsidized housing, the actual market rent reflects what tenants are willing to pay, suggesting a more realistic gross yield scenario.
The N/A-day DOM (days on market) indicates that there might be limited data available regarding how quickly properties are rented out. However, this doesn't necessarily affect the gross yield calculation. It does, however, imply that the rental market might be stable, given the high renter density.
In summary, the gross yield based on the ZORI figure of 7.17% is more reflective of the actual returns an investor might expect in North Charleston, SC, compared to the FMR-based yield of 5.73%. Investors should use the higher yield as a starting point for their analysis, considering that it aligns better with current market conditions.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.