Location: Franklin County, FL | Metro: Franklin County, FL
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,100 |
| 1 Bedroom | $1,150 |
| 2 Bedrooms | $1,250 |
| 3 Bedrooms | $1,640 |
| 4 Bedrooms | $1,640 |
| 5 Bedrooms | $1,902 |
| 6 Bedrooms | $2,130 |
| 7 Bedrooms | $2,300 |
| 8 Bedrooms | $2,415 |
U.S. Census Bureau data (2024)
The analysis of Section 8 cap rates for ZIP code 32323 reveals a distinct picture when comparing federally mandated rent levels to potential market rents. The annualized Fair Market Rent (FMR) for a two-bedroom unit in the metro area, set at $1,240 per month for fiscal year 2026, translates into an annual rental income of $14,880. Using the median home value of $233,590, this implies a gross yield of approximately 6.37%. This calculation is based on the formula: (Annual Rental Income / Median Home Value) * 100.
In contrast, the absence of a specified market rent for ZIP 32323 leaves us without a direct comparison point. However, it's important to note that the market rent can significantly influence the gross yield. If we hypothetically consider a market rent that is higher than the FMR, the gross yield would increase accordingly. For instance, if the market rent were $1,500 per month, the annual rental income would be $18,000, leading to a gross yield of about 7.71%. This demonstrates a clear advantage in terms of yield for market-rate rentals over Section 8 units.
Given the 49.3% renter density in ZIP 32323, it suggests a competitive rental market where landlords might find it challenging to attract tenants who prefer market-rate leases over Section 8 vouchers. Additionally, the lack of data regarding the days on market (DOM) makes it difficult to assess how quickly properties might turn over or the likelihood of securing long-term tenants. In such a scenario, the reliability of Section 8 rental income becomes more appealing due to the government backing and steady stream of payments.
The implied gross yield of 6.37% from the FMR is a conservative figure that provides stability and predictability, which is crucial for small-portfolio investors and landlords. While the hypothetical market rate scenario offers a higher gross yield, the risks associated with vacancy rates and tenant turnover could offset this benefit. Therefore, for ZIP 32323, the Section 8 scenario presents a more realistic and secure investment option, especially considering the high renter density and the need for stable cash flows.
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.