Location: Montgomery County, GA | Metro: Montgomery County, GA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $850 |
| 1 Bedroom | $850 |
| 2 Bedrooms | $1,060 |
| 3 Bedrooms | $1,450 |
| 4 Bedrooms | $1,700 |
| 5 Bedrooms | $1,972 |
| 6 Bedrooms | $2,209 |
| 7 Bedrooms | $2,386 |
| 8 Bedrooms | $2,505 |
U.S. Census Bureau data (2024)
The analysis for ZIP code 30412 reveals a complex picture regarding potential Section 8 cap rates, primarily due to limited data points. The Federal Market Rent (FMR) for a two-bedroom unit in the fiscal year 2026 is set at $1,000 per month, based on metro area standards. However, the median home value and current market rents for rental properties in this ZIP code are not available, complicating the direct calculation of cap rates.
To derive a rough cap-rate picture, we must first annualize the FMR. This gives us an annual rent of $12,000 for a two-bedroom unit. In the absence of market rent data, we can only speculate about the cap rate if the property were rented at market rates. For Section 8 properties, the cap rate is calculated by taking the annual rent and dividing it by the purchase price of the property. Given the median home value is also not available, we cannot calculate an exact cap rate. Instead, we can discuss the implications of renting a property at the FMR versus what might be expected at market rates, assuming such rates were known.
The implied gross yield for a two-bedroom unit under Section 8 would be based solely on the annualized FMR of $12,000. Without the median home value, we cannot provide a precise cap rate, but it's important to note that Section 8 contracts typically cover a significant portion of the mortgage payment, property taxes, and insurance, making the investment relatively stable and predictable.
In contrast, the scenario where market rents are higher would present a different gross yield. While the exact figure is unknown, it's reasonable to assume that market rents could offer a higher monthly income than the $1,000 FMR. This would increase the annual income and potentially improve the cap rate, assuming the median home value remains constant.
However, the 0.0% renter density in ZIP 30412 suggests that there is a very low demand for rental housing in this area. This makes it less likely that market rents would significantly exceed the FMR, as there isn't a robust rental market to support higher rates. Additionally, the lack of data on the days on market (DOM) for rental properties means we cannot assess how quickly a property might be leased at market rates, further complicating the decision-making process for investors.
In summary, while the Section 8 program provides a guaranteed $12,000 annual rent for a two-bedroom unit, the lack of market rent data and the low renter density in ZIP 30412 make it difficult to compare this with potential market yields. The stability offered by Section 8 contracts is a significant advantage in an area with little rental activity.
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.