Location: Miami-Miami Beach-Kendall, FL | Metro: Miami-Miami Beach-Kendall, 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 | $2,640 |
| 1 Bedroom | $2,860 |
| 2 Bedrooms | $3,460 |
| 3 Bedrooms | $4,420 |
| 4 Bedrooms | $5,060 |
| 5 Bedrooms | $5,870 |
| 6 Bedrooms | $6,574 |
| 7 Bedrooms | $7,100 |
| 8 Bedrooms | $7,455 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,860 | $421,495 | 0.68% | D |
| 2BR | $3,460 | $686,282 | 0.5% | F |
| 3BR | $4,420 | $1,292,263 | 0.34% | F |
| 4BR | $5,060 | $2,423,476 | 0.21% | F |
| 5BR | $5,870 | $4,686,552 | 0.13% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 33137 in Miami, FL, provides a clear picture of the financial landscape for potential investments. Using the Federal Market Rent (FMR) for a two-bedroom apartment at $3040 annually and the Zillow Observed Rent Index (ZORI) at $3,530 annually, we can derive the implied gross yields relative to the median home value of $659,974.
First, let's calculate the gross yield based on the FMR. With an annualized rent of $3040, the implied gross yield is approximately 0.46%, calculated by dividing the annual rent by the median home value. This represents the income generated purely from rental payments without considering expenses.
Next, using the ZORI figure of $3,530 annually, the implied gross yield increases to about 0.54%. Again, this calculation is derived by dividing the annual rent by the median home value. This higher yield reflects the potential income if the property were rented at market rates rather than through the Section 8 program.
The difference between these two gross yields highlights the trade-off between accepting Section 8 tenants and renting to market-rate tenants. Given the 71.8% renter density in ZIP 33137, it suggests that there is a strong demand for rental properties, making market-rate rentals potentially more attractive. Additionally, the 112-day Days on Market (DOM) indicates that properties take nearly four months to be leased, which could impact cash flow and the overall investment strategy.
In conclusion, while the market rent scenario offers a slightly better gross yield, the decision should consider the local rental market dynamics, including the high renter density and the relatively long time it takes to lease properties. The Section 8 program might offer more stable occupancy rates despite the lower gross yield, which could be advantageous for small-portfolio investors looking for consistent income streams.
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.