Location: Grady County, GA | Metro: Decatur County, GA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $770 |
| 1 Bedroom | $770 |
| 2 Bedrooms | $1,000 |
| 3 Bedrooms | $1,370 |
| 4 Bedrooms | $1,570 |
| 5 Bedrooms | $1,821 |
| 6 Bedrooms | $2,040 |
| 7 Bedrooms | $2,203 |
| 8 Bedrooms | $2,313 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 39897 reveals two distinct scenarios based on the Federal Market Rent (FMR) and the market rent data. Using the annualized 2BR FMR of $970 for fiscal year 2026, the implied gross yield is approximately 4.41%. This calculation is derived by multiplying the monthly FMR by 12 months and dividing it by the median home value of $219,896.
In contrast, using the market rent figure of $698 from the Census ACS, the implied gross yield drops significantly to about 3.63%. The lower market rent reflects the actual rental rates in the area, whereas the FMR represents a higher subsidy rate that the government pays to cover the difference between what a tenant can afford and the actual rent.
Given the 23.5% renter density in ZIP 39897, it is important to consider the practical implications of these gross yields. A higher renter density typically suggests a larger pool of potential tenants, which could support higher rents. However, the fact that the days on market (DOM) is listed as N/A indicates there might be limited data on how quickly properties are rented out, which could affect the reliability of the FMR-based yield.
The FMR-based gross yield of 4.41% is theoretically possible but relies heavily on the availability of Section 8 vouchers and the willingness of landlords to participate in the program. The market rent-based gross yield of 3.63%, however, is more reflective of the current rental environment and does not depend on government subsidies, making it a more realistic scenario for most investors.
To conclude, while the Section 8 program offers a higher gross yield at 4.41%, the actual market conditions suggest a more modest yield of 3.63%. Investors should weigh the benefits of participating in the Section 8 program against the risks and consider the local demand for subsidized housing. The market rent yield provides a solid baseline for investment decisions, especially considering the limited data on rental speed in the 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.