Location: Darlington County, SC | Metro: Florence, 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 | $1,100 |
| 1 Bedroom | $1,110 |
| 2 Bedrooms | $1,270 |
| 3 Bedrooms | $1,630 |
| 4 Bedrooms | $1,750 |
| 5 Bedrooms | $2,030 |
| 6 Bedrooms | $2,274 |
| 7 Bedrooms | $2,456 |
| 8 Bedrooms | $2,579 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,110 | $71,370 | 1.56% | A+ |
| 2BR | $1,270 | $132,281 | 0.96% | C |
| 3BR | $1,630 | $227,173 | 0.72% | D |
| 4BR | $1,750 | $398,711 | 0.44% | F |
| 5BR | $2,030 | $466,179 | 0.44% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 29501 in Florence, SC, provides a clear picture of potential investment returns under different rental scenarios. The Federal Market Rent (FMR) for a two-bedroom apartment in fiscal year 2024 is set at $1080 per month. When annualized, this translates to an income of $12,960 per year. Given the median home value of $236,804 in the area, the implied gross yield for a property rented through the Section 8 program would be approximately 5.47%. This calculation is derived by dividing the annualized FMR by the median home value.
In contrast, the market rent for a similar two-bedroom property, as indicated by the Zillow Observed Rent Index (ZORI), stands at $1,309 monthly. Annualizing this figure yields an income of $15,708 per year. Using the same median home value, this scenario suggests a gross yield of about 6.64%. This higher yield reflects the potential for greater cash flow when renting at market rates rather than through government-subsidized programs.
Evaluating these figures against the local rental market conditions, it's important to note that only 36.5% of residents in ZIP 29501 are renters. This relatively low renter density could indicate a competitive environment for landlords seeking tenants, especially those outside of government assistance programs. Additionally, the days-on-market (DOM) statistic of 54 days for rentals in this area suggests a moderate level of competition; properties are neither selling too quickly nor lingering on the market for extended periods.
Given these factors, the Section 8 scenario with a gross yield of 5.47% appears more realistic for many landlords and small-portfolio investors in ZIP 29501. While the market rent scenario offers a higher gross yield of 6.64%, the lower renter density and slightly longer DOM indicate that securing a market-rate tenant might be challenging. The stability and guaranteed nature of Section 8 payments can outweigh the allure of higher yields, making it a preferred option for some investors in this particular market.
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.