Location: West Palm Beach-Boca Raton, FL | Metro: West Palm Beach-Boca Raton, 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 | $2,860 |
| 1 Bedroom | $3,010 |
| 2 Bedrooms | $3,520 |
| 3 Bedrooms | $4,570 |
| 4 Bedrooms | $5,280 |
| 5 Bedrooms | $6,125 |
| 6 Bedrooms | $6,860 |
| 7 Bedrooms | $7,409 |
| 8 Bedrooms | $7,779 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $3,520 | $338,825 | 1.04% | B |
| 3BR | $4,570 | $522,563 | 0.87% | C |
| 4BR | $5,280 | $772,629 | 0.68% | D |
| 5BR | $6,125 | $999,862 | 0.61% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 33449, Lake Worth Beach, FL, reveals a stark contrast between the federally determined Fair Market Rent (FMR) and the actual market rents. For a two-bedroom property, the annualized FMR for FY 2024 is set at $2720, while the Census ACS reports a market rent of $3,102 per month.
Based on the median home value of $733,745, we can calculate the gross yield for both the FMR and market rent scenarios. For the FMR scenario, the annual rent of $2720 translates to a gross yield of approximately 0.37%. This is calculated by taking the monthly FMR ($2720/12 = $226.67), multiplying it by 12 months to get the annual income ($2720), and then dividing that by the median home value ($733,745).
In the case of market rent, the annual rent would be $3,102 multiplied by 12 months, equaling $37,224. Dividing this by the median home value gives us a gross yield of roughly 5.07%. This calculation is significantly higher than the FMR scenario, reflecting the disparity between government-set rates and what the market demands.
The implied gross-yield of 0.37% based on FMR is far lower than the market rent yield of 5.07%, suggesting that relying solely on Section 8 rental assistance in this area could result in very low returns for landlords and small-portfolio investors. Given the renter density of 4.7% in the area, it's clear that the number of potential Section 8 tenants is limited, making the market rent scenario more realistic for most properties.
The N/A-day DOM (Days On Market) indicates that there is no specific data available regarding how long properties typically stay on the market before being rented. However, considering the high median home value and the relatively low renter density, it's reasonable to infer that properties in Lake Worth Beach are likely to attract market rate tenants rather than those participating in the Section 8 program. Therefore, investors should expect a cap rate closer to the 5.07% implied by market rents, rather than the 0.37% suggested by the FMR.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.