Location: Tampa-St. Petersburg-Clearwater, FL | Metro: Tampa-St. Petersburg-Clearwater, FL MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,640 |
| 1 Bedroom | $1,690 |
| 2 Bedrooms | $1,970 |
| 3 Bedrooms | $2,520 |
| 4 Bedrooms | $3,060 |
| 5 Bedrooms | $3,550 |
| 6 Bedrooms | $3,976 |
| 7 Bedrooms | $4,294 |
| 8 Bedrooms | $4,509 |
The analysis for ZIP code 33685 in Florida focuses on deriving a rough picture of the Section 8 cap rate, considering the Federal Market Rent (FMR) and market conditions.
The annualized Fair Market Rent (FMR) for a two-bedroom apartment in ZIP 33685 for fiscal year 2024 is set at $1900. This figure represents the maximum amount that a landlord can charge a Section 8 tenant for housing. To calculate the implied gross yield using this FMR, we need to consider the median home value. However, the median home value for this ZIP code is currently not available, making it difficult to provide an exact cap rate based on the FMR alone.
In a scenario where the market rent is also not available, we must rely on the FMR as a proxy for rental income potential. The implied gross yield would be calculated by taking the annual rent ($1900 x 12 = $22,800) and dividing it by the property value. Without the median home value, we cannot provide a precise gross yield percentage. However, if we hypothetically assume a median home value, say $300,000, the implied gross yield would be approximately 7.6%. This is a theoretical example; actual yields will vary based on the true property values in the area.
Given the lack of specific data on renter density and days on market (DOM), it's challenging to determine which scenario is more realistic. Typically, higher renter density and shorter DOM indicate a more robust rental market, which could mean that market rents might be closer to or even exceed the FMR. Conversely, lower renter density and longer DOM suggest a less competitive market, where rents might be below the FMR.
To conclude, while the exact cap rate cannot be determined due to missing data points such as median home value and precise renter density, the implied gross yield based on the FMR provides a useful benchmark. Landlords and small-portfolio investors should use this information alongside local market insights to make informed decisions about participating in the Section 8 program in ZIP 33685.
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.