Location: North Port-Bradenton-Sarasota, FL | Metro: North Port-Bradenton-Sarasota, FL MSA
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 | $2,100 |
| 1 Bedroom | $2,250 |
| 2 Bedrooms | $2,630 |
| 3 Bedrooms | $3,340 |
| 4 Bedrooms | $3,980 |
| 5 Bedrooms | $4,617 |
| 6 Bedrooms | $5,171 |
| 7 Bedrooms | $5,585 |
| 8 Bedrooms | $5,864 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,250 | $156,023 | 1.44% | A |
| 2BR | $2,630 | $312,380 | 0.84% | C |
| 3BR | $3,340 | $412,371 | 0.81% | C |
| 4BR | $3,980 | $544,250 | 0.73% | D |
| 5BR | $4,617 | $708,438 | 0.65% | D |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 34243 in Sarasota, FL, reveals important insights into the financial viability of properties under this program. The Fair Market Rent (FMR) for a 2-bedroom unit in fiscal year 2024 is set at $2360 annually, while the market rent, as indicated by the Zillow Observed Rent Index (ZORI), stands at $2,079 per month. To derive the cap rate, we need to calculate the gross yield based on these figures.
First, let's consider the annualized FMR. At $2360 per year, the implied gross yield for a property valued at $399,270 would be approximately 0.59%. This is calculated by dividing the annual rent ($2360) by the median home value ($399,270).
Next, using the ZORI figure, the annual market rent for a 2-bedroom unit would be $24,948 ($2,079 x 12 months). This results in an implied gross yield of about 6.25%, which is significantly higher than the FMR scenario. The calculation here involves dividing the annual market rent by the median home value.
Given that only 28.5% of residents in ZIP 34243 are renters, and the average days on market (DOM) for rental units is 57 days, it is clear that the market rent scenario is more realistic. The lower renter density suggests that there is less competition for rental units among tenants, making it easier to attract and retain tenants willing to pay market rates. Additionally, the relatively short DOM indicates that homes are rented quickly, further supporting the likelihood of achieving market rents rather than relying solely on Section 8 rates.
The disparity between the two yields highlights the potential financial impact on investment decisions. While the Section 8 program offers stability and a guaranteed tenant base, the gross yield is substantially lower compared to renting at market rates. For investors looking to maximize returns, the market rent scenario presents a more attractive option, despite the lower tenant density.
In conclusion, the gross yield derived from the ZORI market rent figure of $2,079 per month is significantly more favorable for investors in ZIP 34243. The quick turnover and high market rent suggest that properties can achieve a gross yield of 6.25%, far exceeding the 0.59% implied by the Section 8 FMR. This analysis underscores the importance of considering local rental market conditions when evaluating the potential returns of a property.
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.