Location: Dixie County, FL | Metro: Dixie County, FL
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 | $960 |
| 1 Bedroom | $1,000 |
| 2 Bedrooms | $1,090 |
| 3 Bedrooms | $1,430 |
| 4 Bedrooms | $1,430 |
| 5 Bedrooms | $1,659 |
| 6 Bedrooms | $1,858 |
| 7 Bedrooms | $2,007 |
| 8 Bedrooms | $2,107 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,090 | $198,193 | 0.55% | F |
| 3BR | $1,430 | $257,935 | 0.55% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 32680 in Old Town, FL, reveals some key insights into potential investment opportunities. To start, let's look at the Fair Market Rent (FMR) for a two-bedroom apartment, which is set at $1,180 annually according to FY 2026 metro data. Given the median home value of $224,362, this translates into an implied gross yield of approximately 5.26%. This calculation is based on the annualized FMR divided by the median home value, providing a straightforward metric for potential rental income.
On the other hand, the market rent for a similar property, as per Census ACS data, stands at $826 annually. Using the same median home value, this scenario implies a gross yield of about 3.68%. The disparity between these two figures highlights the importance of understanding the local rental market dynamics when considering Section 8 investments.
To determine which scenario is more realistic, we must consider the 13.5% renter density in Old Town, FL. While this figure suggests that a significant portion of the population rents, it does not provide a direct indication of the demand for Section 8 properties specifically. Additionally, the lack of data on the number of days on market (DOM) makes it challenging to assess how quickly these units might be occupied under either rental scenario.
Given the higher implied gross yield of 5.26% based on the FMR compared to the market rent's 3.68%, it appears that the FMR scenario offers a more favorable return on investment. However, it's important to note that the actual performance will depend on various factors including the specific location within the zip code, the condition of the properties, and the overall management strategy. Landlords and small-portfolio investors should carefully evaluate these aspects to ensure they align with their financial goals and risk tolerance.
In conclusion, while the FMR-based gross yield presents a more attractive initial return, the reality of achieving this rate must be tempered with an understanding of the local rental market and the challenges associated with maintaining occupancy. A thorough assessment of individual property characteristics and market conditions is essential for making informed investment decisions.
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.