Location: Sebastian-Vero Beach-West Vero Corridor, FL | Metro: Sebastian-Vero Beach-West Vero Corridor, 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 | $1,220 |
| 1 Bedroom | $1,230 |
| 2 Bedrooms | $1,610 |
| 3 Bedrooms | $1,970 |
| 4 Bedrooms | $2,690 |
| 5 Bedrooms | $3,120 |
| 6 Bedrooms | $3,494 |
| 7 Bedrooms | $3,774 |
| 8 Bedrooms | $3,963 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,230 | $157,633 | 0.78% | D |
| 2BR | $1,610 | $305,396 | 0.53% | F |
| 3BR | $1,970 | $410,405 | 0.48% | F |
| 4BR | $2,690 | $502,314 | 0.54% | F |
| 5BR | $3,120 | $531,467 | 0.59% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 32967, located in Vero Beach, FL, reveals a significant disparity between the federally mandated Fair Market Rent (FMR) and the local market rents. For a two-bedroom property, the annualized FMR is set at $1400 per month, which translates to an annual rental income of $16,800. The median home value in this area is $405,601. Using these figures, the implied gross yield under the FMR scenario would be approximately 4.14%. This calculation is derived by dividing the annual rental income ($16,800) by the median home value ($405,601).
In contrast, the Zillow Observed Rental Index (ZORI) indicates that the market rent for a similar property is $2,389 per month, resulting in an annual rental income of $28,668. When this figure is used against the median home value, the implied gross yield increases to about 7.07%. This higher yield reflects the potential income that could be generated if the property were rented at market rates.
The 19.9% renter density suggests a relatively low proportion of renters compared to homeowners in the area, which might indicate a competitive market for rental properties. However, the Days on Market (DOM) statistic of 64 days signals that it takes roughly two months to find a tenant, which can impact the overall rental income due to periods of vacancy. Given these factors, the market rent scenario appears more realistic for most investors.
To summarize, the FMR scenario yields a gross return of 4.14%, while the market rent scenario offers a gross return of 7.07%. Although the FMR provides a stable income source guaranteed by the government, it is substantially lower than what the market can offer. Considering the local market conditions, including the renter density and DOM, the market rent scenario presents a more favorable gross yield for investors.
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.