Location: Palm Bay-Melbourne-Titusville, FL | Metro: Palm Bay-Melbourne-Titusville, FL MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,330 |
| 1 Bedroom | $1,530 |
| 2 Bedrooms | $1,780 |
| 3 Bedrooms | $2,380 |
| 4 Bedrooms | $2,710 |
| 5 Bedrooms | $3,144 |
| 6 Bedrooms | $3,521 |
| 7 Bedrooms | $3,803 |
| 8 Bedrooms | $3,993 |
The analysis of the Section 8 cap-rate picture for ZIP code 32775 reveals some key insights into the potential rental income and gross yields for landlords and small-portfolio investors.
First, let's consider the Federal Market Rent (FMR) for a two-bedroom unit, which is set at $1,710 annually for fiscal year 2026 in the metropolitan area. This translates to a monthly rent of approximately $142.50. Given that the median home value in ZIP 32775 is not available, we cannot calculate an exact cap rate. However, we can still provide a rough estimate of the gross yield based on the annualized FMR.
To derive the gross yield, we need to assume a property value. For example, if we assume a property value of $200,000, the annual rent of $1,710 would imply a gross yield of about 0.85%. This calculation is based on the formula: Gross Yield = (Annual Rent / Property Value) * 100. If the property value were higher, say $250,000, the gross yield would decrease to around 0.68%. Conversely, if the property value were lower, such as $150,000, the gross yield would increase to approximately 1.14%.
However, these figures are based solely on the FMR and do not take into account the market rent, which is also not available. In practice, market rents could be higher or lower than the FMR, thus affecting the actual gross yield. To get a more accurate picture, investors should research local market conditions and adjust their calculations accordingly.
The lack of specific data on renter density and days on market (DOM) makes it challenging to determine which scenario is more realistic. However, generally speaking, a higher renter density might suggest a stronger demand for rental properties, potentially leading to higher market rents. A shorter DOM indicates quicker leasing, which can be beneficial for maintaining steady cash flow.
In conclusion, while the exact cap rate for ZIP 32775 cannot be determined due to missing data points, the gross yield based on the FMR provides a starting point for analysis. Investors must conduct thorough research on local market conditions to refine these estimates and make informed decisions.
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.