Location: Lakeland-Winter Haven, FL | Metro: Lakeland-Winter Haven, FL MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,360 |
| 1 Bedroom | $1,380 |
| 2 Bedrooms | $1,670 |
| 3 Bedrooms | $2,280 |
| 4 Bedrooms | $2,790 |
| 5 Bedrooms | $3,236 |
| 6 Bedrooms | $3,624 |
| 7 Bedrooms | $3,914 |
| 8 Bedrooms | $4,110 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 33827 in Florida reveals significant differences between the federal market rent (FMR) and the actual market rent. For a two-bedroom unit, the annualized FMR for FY 2024 is set at $1660, while the Census ACS reports an average market rent of $1,175.
To determine the gross yield, we need to compare these rents against the median home value in the area, which stands at $296,536. The implied gross yield based on the FMR would be approximately 5.6%, calculated by taking $1660 and dividing it by $296,536. On the other hand, using the market rent figure of $1,175 results in a much lower gross yield of about 4.0%.
The disparity between these two yields is notable, with the FMR-based yield being 1.6 percentage points higher than the market rent-based yield. However, considering the renter density in ZIP 33827 is only 16.9%, it becomes evident that the market rent scenario is more realistic. This lower renter density suggests that a larger portion of the population owns homes rather than renting, which can depress rental rates and make the FMR less reflective of the actual market conditions.
The N/A-day days on market (DOM) indicates incomplete data, which could imply either a highly competitive market with quick turnovers or a lack of recent sales data to provide a reliable DOM figure. In either case, this further supports the notion that the market rent of $1,175 is a more accurate basis for calculating the gross yield, as it aligns better with the observed ownership trends in the area.
In conclusion, while the FMR-based gross yield of 5.6% might seem attractive, the actual market conditions, particularly the low renter density, suggest that a more realistic gross yield for investors in ZIP 33827 is around 4.0%. This assessment provides a clearer picture of the potential returns and should guide investment decisions in this area.
Data Sources: FMR data from HUD (2027). 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.