Location: Fort Lauderdale, FL | Metro: Fort Lauderdale, FL HUD Metro FMR Area
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 | $1,490 |
| 1 Bedroom | $1,610 |
| 2 Bedrooms | $1,960 |
| 3 Bedrooms | $2,680 |
| 4 Bedrooms | $3,090 |
| 5 Bedrooms | $3,584 |
| 6 Bedrooms | $4,014 |
| 7 Bedrooms | $4,335 |
| 8 Bedrooms | $4,552 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,610 | $133,555 | 1.21% | A |
| 2BR | $1,960 | $258,638 | 0.76% | D |
| 3BR | $2,680 | $500,880 | 0.54% | F |
| 4BR | $3,090 | $559,888 | 0.55% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP 33060 (Pompano Beach, FL) provides a clear picture of the potential returns for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a 2-bedroom unit in FY 2024 is set at $1,730 annually, while the Zillow Observed Rental Index (ZORI) indicates a market rent of $2,320 per month.
To derive the gross yield, we first annualize these figures. For the FMR, the annual rent is already provided at $1,730. For the ZORI, multiplying the monthly rent by 12 gives an annual rent of $27,840. Using the median home value of $430,567, the implied gross yield for the FMR scenario is calculated as follows:
$1,730 / $430,567 = 0.00402 or 0.402% annually.
In contrast, the implied gross yield for the market rent scenario using ZORI is:
$27,840 / $430,567 = 0.0646 or 6.46% annually.
Given the 49.0% renter density and a 59-day Days on Market (DOM), the ZORI-based gross yield of 6.46% is more realistic. This is because the higher renter density suggests a robust rental market where tenants can be found relatively quickly, indicated by the shorter DOM. Landlords should expect to achieve closer to the market rent rather than the lower FMR when renting out properties under Section 8 in this area.
The significant difference between the two yields underscores the importance of understanding local market conditions and the specific terms of Section 8 contracts. While the FMR yield of 0.402% is considerably lower, it does not reflect the typical rental income in ZIP 33060. Investors should focus on the ZORI-based yield as a more accurate representation of potential earnings.
This analysis assumes that the property owner participates in the Section 8 program and receives the market rent. However, it's important to note that Section 8 payments might not always cover the full market rent, so investors should adjust their expectations accordingly. Nonetheless, the 6.46% gross yield offers a clearer benchmark for evaluating investment opportunities in Pompano Beach, FL.
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.