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 | $1,780 |
| 1 Bedroom | $1,940 |
| 2 Bedrooms | $2,340 |
| 3 Bedrooms | $2,990 |
| 4 Bedrooms | $3,420 |
| 5 Bedrooms | $3,967 |
| 6 Bedrooms | $4,443 |
| 7 Bedrooms | $4,798 |
| 8 Bedrooms | $5,038 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,940 | $191,852 | 1.01% | B |
| 2BR | $2,340 | $302,192 | 0.77% | D |
| 3BR | $2,990 | $546,054 | 0.55% | F |
| 4BR | $3,420 | $647,169 | 0.53% | F |
| 5BR | $3,967 | $723,248 | 0.55% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 33189, Cutler Bay, FL, reveals some interesting dynamics between government-subsidized rental income and market rates. Using the Fair Market Rent (FMR) for a 2-bedroom apartment at $2200 per month (annualized to $26,400) and the Zillow Observed Rent Index (ZORI) at $2,747 per month (annualized to $32,964), we can calculate the gross yields against the median home value of $549,150.
The gross yield based on the annualized FMR is approximately 4.8%. This is derived from dividing the annual rental income ($26,400) by the median home value ($549,150). For the ZORI-based market rent, the gross yield increases to about 6.0%, calculated by dividing the annual market rent ($32,964) by the median home value ($549,150).
Given the 41.2% renter density in the area, it is evident that there is a significant portion of the population who are likely to be interested in Section 8 housing. However, the lack of data on the days on market (DOM) makes it difficult to predict how quickly properties might be filled under a Section 8 program versus the open market. The higher gross yield from market rents suggests that landlords could potentially earn more by renting outside of the Section 8 program, assuming they can find tenants willing to pay the higher rate and the property remains occupied.
Despite the higher gross yield from market rents, the stability and guaranteed income from Section 8 contracts might appeal to landlords and small-portfolio investors looking for consistent cash flow. The lower gross yield of 4.8% associated with FMRs provides a clear benchmark for the minimum income potential from a Section 8 property in this ZIP code.
In conclusion, while the market rent offers a more attractive gross yield at 6.0%, the reality of finding and keeping market-rate tenants must be weighed against the stability of Section 8 contracts, which offer a gross yield of 4.8%. Investors should consider their risk tolerance and financial goals when deciding whether to participate in the Section 8 program or pursue higher market rents.
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.