Location: Walton County, FL | Metro: Walton County, FL 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 | $1,400 |
| 1 Bedroom | $1,690 |
| 2 Bedrooms | $1,840 |
| 3 Bedrooms | $2,550 |
| 4 Bedrooms | $3,080 |
| 5 Bedrooms | $3,573 |
| 6 Bedrooms | $4,002 |
| 7 Bedrooms | $4,322 |
| 8 Bedrooms | $4,538 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,690 | $404,849 | 0.42% | F |
| 2BR | $1,840 | $569,556 | 0.32% | F |
| 3BR | $2,550 | $675,353 | 0.38% | F |
| 4BR | $3,080 | $1,195,856 | 0.26% | F |
| 5BR | $3,573 | $2,612,512 | 0.14% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate scenario for ZIP 32459, Santa Rosa Beach, FL, can be analyzed using the Fair Market Rent (FMR) and Zillow's Observed Rent Index (ZORI) for a two-bedroom property. The annualized FMR for a 2BR unit in this ZIP code is $1790 per month, or $21,480 annually. This figure represents the maximum rent that a landlord can charge under the Section 8 program for FY 2024. In contrast, the market rent, as indicated by ZORI, stands at $1,947 per month, equating to $23,364 annually.
To derive the implied gross yield, we use the median home value of $867,723. For the FMR scenario, the gross yield is calculated as follows:
Given the 21.9% renter density and a 90-day days-on-market (DOM), it is important to consider which of these yields is more realistic for potential investors. The FMR gross yield of 2.47% is lower than the market yield of 2.69%, reflecting the capped nature of Section 8 rents. However, the lower renter density suggests that finding tenants might be challenging, especially since it takes an average of 90 days to find a new tenant. This could impact the occupancy rates and the overall viability of the investment.
The higher market yield of 2.69% indicates better financial performance if market rents can be achieved. Yet, the challenge lies in the fact that only 21.9% of the population in ZIP 32459 are renters, and the extended DOM period implies that securing a tenant, whether through Section 8 or the private market, requires significant effort. Therefore, while the ZORI-based yield is more attractive, the practical considerations of tenant acquisition and the specific dynamics of the Santa Rosa Beach rental market suggest that the FMR-based yield is a more conservative and realistic expectation for Section 8 properties.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.