Location: Neshoba County, MS | Metro: Kemper County, MS
| Unit Size | Monthly FMR |
|---|---|
| Studio | $770 |
| 1 Bedroom | $770 |
| 2 Bedrooms | $910 |
| 3 Bedrooms | $1,190 |
| 4 Bedrooms | $1,230 |
| 5 Bedrooms | $1,427 |
| 6 Bedrooms | $1,598 |
| 7 Bedrooms | $1,726 |
| 8 Bedrooms | $1,812 |
U.S. Census Bureau data (2024)
A decision tree for whether to buy in ZIP code 39328 for Section 8 investment hinges on three key factors: Fair Market Rent (FMR), market rent, and demand metrics.
Does FMR $910 (metro FY 2026) clear debt service on a $130,892 property?
If your $910 FMR can cover the debt service costs on a property valued at $130,892, then the answer is yes. This means that the rental income generated from a Section 8 tenant would be sufficient to meet all mortgage and other financing obligations associated with the property. Debt service typically includes principal and interest payments on the mortgage loan.
If the FMR does not cover the debt service, the answer is no. The landlord would need to consider other sources of income or reduce expenses to ensure financial viability.
Is market rent $431 (Census ACS) above, at, or below FMR?
If the $431 market rent is significantly below the FMR of $910, then it's advisable to proceed with caution. The gap between market rent and FMR indicates that Section 8 properties might be more attractive to tenants than market-rate rentals, thus increasing the likelihood of finding tenants willing to pay the FMR. However, if market rents are too low, it could also suggest that the area has limited economic activity, which might impact long-term property values and desirability.
If market rent is close to or above the FMR, the answer is yes. This suggests that the local rental market is strong, and there is potential for higher returns on investment beyond just covering debt service.
Are 21.7% renters + N/A-day DOM enough demand?
The percentage of renters at 21.7% is relatively low, indicating a smaller pool of potential tenants. However, if the days on market (DOM) for rental properties is short or non-existent (N/A), this implies high demand for available rental units. High demand despite a lower percentage of renters can still make the area viable for Section 8 investments.
If the DOM is long, the answer is no. A long DOM suggests weak demand, meaning it could take longer to find a tenant, leading to potential vacancies and reduced income.
It depends on how you balance the low percentage of renters against the strong demand indicated by DOM. If you can manage the property effectively and find ways to attract tenants, such as offering amenities or maintaining a competitive edge, then the area could still be a good investment.
In summary, if the FMR covers debt service and market rent is below FMR, but there is strong demand as evidenced by quick DOM, then the investment in ZIP 39328 for Section 8 properties is likely to be positive. However, landlords must carefully assess their ability to manage the property and maintain occupancy rates in an environment where the rental market is not robust compared to other areas.
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.