Location: Atlanta-Sandy Springs-Roswell, GA | Metro: Atlanta-Sandy Springs-Roswell, GA HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,630 |
| 1 Bedroom | $1,700 |
| 2 Bedrooms | $1,850 |
| 3 Bedrooms | $2,200 |
| 4 Bedrooms | $2,620 |
| 5 Bedrooms | $3,039 |
| 6 Bedrooms | $3,404 |
| 7 Bedrooms | $3,676 |
| 8 Bedrooms | $3,860 |
The analysis of the Section 8 cap-rate scenario for ZIP code 30302 in Georgia reveals several key points that are essential for landlords and small-portfolio investors.
Firstly, the Fair Market Rent (FMR) for a 2-bedroom apartment in ZIP 30302 for fiscal year 2024 is set at an annual rate of $1940. This figure represents the maximum amount that a landlord can charge for a Section 8 rental agreement. However, it's important to note that the median home value in this area is currently not available, as well as the market rent for similar properties, which makes direct comparisons challenging.
To derive the implied gross yield, we must consider the FMR as a potential income stream. Given the annualized FMR of $1940, if we assume a property value based on typical yields for Section 8 properties, we can estimate the gross yield. For instance, if we take a conservative property value of $100,000, the implied gross yield would be approximately 1.94%. This calculation assumes that the entire value of the property is financed, which is not always the case, but serves as a baseline for understanding the potential returns.
In contrast, without the specific market rent figures, it's difficult to provide an exact comparison. Typically, market rents tend to be higher than FMRs, which suggests that the gross yield outside of Section 8 might be better. However, the lack of data regarding median home values and market rents prevents us from making a precise comparison.
The data also lacks specific figures on the percentage of renters and the days on market (DOM), which are crucial metrics for determining the overall attractiveness of the ZIP code for investment purposes. These metrics would help us understand the demand for rentals and how quickly units are typically leased, providing insights into the stability and speed of cash flow.
Given the limited data, the Section 8 scenario with an annualized FMR of $1940 implies a lower gross yield compared to what might be expected from market rents. This makes the Section 8 option less attractive from a purely financial standpoint, although it offers stable long-term tenancy and reduced vacancy risks.
Investors should carefully evaluate the specific conditions and opportunities within ZIP 30302, considering factors beyond just the gross yield, such as the local housing market dynamics, tenant turnover rates, and any subsidies or incentives that might affect the overall profitability.
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.