Section 8 Fair Market Rent (FMR) for ZIP 33280 - 2027

FY 2027 Fair Market Rent Rates

The Section 8 cap rate analysis for ZIP code 33280 in Florida provides insight into the potential returns for landlords and small-portfolio investors. To begin, we need to understand the Fair Market Rent (FMR) and the market rent for a two-bedroom property, which are critical in calculating the gross yield.

The annualized FMR for a two-bedroom property in ZIP 33280 for fiscal year 2024 is set at $2320. This figure represents the government-subsidized rent amount that tenants would pay. However, the median home value in the area is not available, which complicates the direct calculation of the cap rate. Additionally, the market rent for the area is also listed as N/A, indicating that there isn't sufficient data to determine what the typical market rent might be for similar properties.

To derive an implied gross yield, we must consider the FMR and compare it to the median home value. Since the median home value is not available, we can only provide a theoretical gross yield based on the FMR alone. In a scenario where the median home value were hypothetically $200,000, the gross yield would be calculated as follows:

$2320 annualized FMR / $200,000 median home value = 1.16%

This gross yield is based solely on the FMR and does not account for expenses such as maintenance, insurance, property taxes, or vacancies. Therefore, the net operating income (NOI) would be lower, resulting in a cap rate that is less favorable than the gross yield suggests.

Given the lack of specific market rent data, it's difficult to provide a second gross yield scenario. However, if market rents were higher than the FMR, the gross yield would also be higher, potentially making investment through Section 8 more attractive. Conversely, if market rents are lower, the attractiveness of Section 8 as an investment strategy diminishes.

The N/A% renter density and N/A-day days on market (DOM) further complicate the analysis. Without these figures, it's challenging to assess how competitive the rental market is and how quickly properties are being rented out. Typically, higher renter density and shorter DOM indicate a more robust rental market, which could support higher market rents and, consequently, better gross yields.

In conclusion, while the FMR provides a starting point for estimating the gross yield, the absence of key data points such as the median home value and market rent means that any conclusions drawn must be treated with caution. For landlords and small-portfolio investors, the FMR-based gross yield of 1.16% under a hypothetical median home value scenario is not particularly compelling without additional context on the local real estate market dynamics.

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.