Location: Orlando-Kissimmee-Sanford, FL | Metro: Orlando-Kissimmee-Sanford, FL MSA
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 | $1,760 |
| 1 Bedroom | $1,830 |
| 2 Bedrooms | $2,080 |
| 3 Bedrooms | $2,600 |
| 4 Bedrooms | $3,030 |
| 5 Bedrooms | $3,515 |
| 6 Bedrooms | $3,937 |
| 7 Bedrooms | $4,252 |
| 8 Bedrooms | $4,465 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,830 | $125,070 | 1.46% | A |
| 2BR | $2,080 | $179,888 | 1.16% | B |
| 3BR | $2,600 | $327,280 | 0.79% | D |
| 4BR | $3,030 | $458,077 | 0.66% | D |
| 5BR | $3,515 | $591,092 | 0.59% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 32714 in Altamonte Springs, FL, provides valuable insights into potential investment returns. To begin, the Fair Market Rent (FMR) for a two-bedroom apartment in FY 2024 is set at $1,970 annually, while the Zillow Observed Rent Index (ZORI) indicates a market rent of $1,563 per month for the same type of unit.
The median home value in ZIP 32714 is $302,993. Using the annualized FMR of $1,970, the implied gross yield for a Section 8 property would be approximately 0.65%. This is calculated by dividing the annual rental income by the median home value: ($1,970 / $302,993) * 100 = 0.65%. On the other hand, using the market rent figure of $1,563 per month, the annualized market rent is $18,756, resulting in an implied gross yield of about 6.2%: ($18,756 / $302,993) * 100 = 6.2%.
The stark difference between these yields is significant, but the reality of the situation lies somewhere in between. Given that 49.1% of residents in Altamonte Springs are renters, there is a notable demand for rental properties, which suggests that the market rent scenario is more plausible. Additionally, the Days on Market (DOM) statistic of 32 days indicates that rental units are typically occupied quickly, further supporting the likelihood of achieving market rents rather than the lower Section 8 rates.
In conclusion, while the Section 8 program offers a guaranteed rent of $1,970 annually, the actual gross yield of 0.65% is considerably lower than the 6.2% implied by market rents. The higher renter density and quick DOM suggest that landlords and small-portfolio investors should aim for market rents when evaluating properties in ZIP 32714, as this aligns better with the current rental landscape and offers a much more attractive return on investment.
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.