Section 8 Fair Market Rent (FMR) for ZIP 32125 - 2027

FY 2027 Fair Market Rent Rates

The Section 8 cap rate analysis for ZIP code 32125 in Unknown, FL, reveals some key insights into potential investment opportunities. To begin, let's consider the Fair Market Rent (FMR) for a two-bedroom apartment, which is set at $1410 per month for FY 2024. This translates to an annualized rent of $16,920.

Given the median home value is currently unavailable, we must work with the data that is available. The FMR represents the maximum amount that a landlord can charge for a Section 8 rental. In this case, the implied gross yield would be calculated based on the annual rent of $16,920.

However, the market rent for the area is also listed as N/A, which complicates the direct comparison between market rents and the FMR. Typically, the gross yield is derived from the market rent, but without this figure, we cannot provide a precise comparison. Therefore, the implied gross yield from the FMR stands alone in this analysis.

The lack of specific data regarding the median home value, renter density, and days on market (DOM) makes it challenging to provide a comprehensive cap rate scenario. Nonetheless, the FMR provides a solid benchmark for the minimum acceptable rent for a Section 8 property in this ZIP code.

In terms of realism, the FMR scenario is more concrete due to the availability of the data. It indicates that for a two-bedroom unit, a landlord can expect a gross income of $16,920 annually under the Section 8 program. While this does not account for expenses or net operating income (NOI), it gives a clear starting point for calculating potential returns.

The absence of market rent data suggests that there may not be sufficient data to determine how competitive the FMR is compared to the broader rental market in 32125. This uncertainty highlights the importance of further research into local rental trends and property values before making any investment decisions.

Investors should also consider the renter density and DOM figures, though these are not provided here. High renter density and low DOM typically indicate a strong rental market, which could support higher market rents. Conversely, if the DOM is high, it might suggest a slower rental market, making the FMR a more reliable indicator of achievable rent.

To summarize, while the FMR of $1410 per month offers a clear annual gross yield of $16,920, the lack of additional data points such as median home value and market rent limits the ability to provide a full cap rate analysis. Investors should seek out more detailed local market information to make informed decisions.

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.