Location: Deltona-Daytona Beach-Ormond Beach, FL | Metro: Deltona-Daytona Beach-Ormond Beach, FL HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,260 |
| 1 Bedroom | $1,360 |
| 2 Bedrooms | $1,670 |
| 3 Bedrooms | $2,200 |
| 4 Bedrooms | $2,400 |
| 5 Bedrooms | $2,784 |
| 6 Bedrooms | $3,118 |
| 7 Bedrooms | $3,367 |
| 8 Bedrooms | $3,535 |
To determine if you should buy in ZIP code 32774 for Section 8 investments, follow this decision tree:
Step 1: Debt Service Coverage Ratio (DSCR)
The Fair Market Rent (FMR) for ZIP 32774 in fiscal year 2024 is $1410. The first question is whether this amount can cover the debt service on a property. Since the property value is not specified (N/A), calculate the DSCR using the formula: DSCR = Net Operating Income / Total Debt Service. If the DSCR is less than 1, the FMR does not clear the debt service, making it a No. If it's greater than or equal to 1, proceed to the next step.
Step 2: Market Rent Comparison
Compare the FMR of $1410 to the market rent in the area. The current market rent is not specified (N/A). If the market rent is above $1410, you can potentially charge higher rents outside of Section 8, leading to a Yes. If the market rent is at or below $1410, consider the demand for rentals.
Step 3: Rental Demand Analysis
ZIP 32774 has N/A% of renters and N/A days as Days on Market (DOM). If the percentage of renters is high and the DOM is low, indicating strong rental demand, then the answer is Yes. High demand means that even though you might be limited to the FMR for Section 8 tenants, you will likely have a steady stream of applicants.
If the rental demand is weak, with a low percentage of renters or high DOM, the answer is No. Weak demand suggests that filling vacancies could be challenging, especially when restricted to the FMR.
In cases where the data is inconclusive or the demand is moderate, the answer is It Depends. Consider other factors such as property management costs, vacancy rates, and the potential for property appreciation.
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.