Location: Breckinridge County, KY | Metro: Meade County, KY HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $740 |
| 1 Bedroom | $740 |
| 2 Bedrooms | $970 |
| 3 Bedrooms | $1,320 |
| 4 Bedrooms | $1,520 |
| 5 Bedrooms | $1,763 |
| 6 Bedrooms | $1,975 |
| 7 Bedrooms | $2,133 |
| 8 Bedrooms | $2,240 |
U.S. Census Bureau data (2024)
A decision tree for whether to buy into ZIP 40171 for Section 8 investment starts with understanding the Fair Market Rent (FMR) and how it aligns with financial goals and local rental conditions.
1) Does FMR of $1040 cover the debt service on a property valued at $175,948?
No: The FMR of $1040 for ZIP 40171 in fiscal year 2024 does not sufficiently cover the debt service on a property priced at $175,948. Debt service typically includes mortgage payments, property taxes, insurance, and maintenance costs. For a property of this value, these costs would likely exceed the FMR, making it financially unviable to rely solely on Section 8 tenants without additional sources of income or subsidies.
It Depends: This scenario applies if you are considering properties under the $175,948 valuation where the FMR could potentially meet or exceed the debt service costs. However, given the specific property value mentioned, this branch is less applicable.
Yes: Not applicable based on the provided data. A property valued at $175,948 would require a higher FMR to ensure that the rent covers all necessary expenses.
2) Is the market rent above, at, or below the FMR?
N/A: There is no available data on market rents for ZIP 40171. Without this information, it's impossible to determine if the market rent is competitive or if there is potential for higher returns outside of Section 8.
3) Are 28.9% renters and the days on the market (DOM) sufficient to indicate demand?
No: With only 28.9% of residents being renters, the demand for rental properties might be insufficient to sustain a Section 8 portfolio. Additionally, the lack of data on DOM suggests that the market dynamics are unclear, which could pose challenges in finding and retaining tenants.
It Depends: While the percentage of renters is relatively low, it doesn't entirely preclude the possibility of success. It depends on the number of Section 8 vouchers available and the willingness of local residents to participate in the program. If the voucher supply is high and demand for affordable housing is strong, this could still be a viable option despite the lower overall rental rate.
Yes: Not applicable based on the provided data. The low percentage of renters and lack of DOM data do not support a positive conclusion about demand.
In summary, based on the current data, the answer to whether you should buy in ZIP 40171 for Section 8 investment is No. The FMR does not adequately cover the debt service on a property of this value, and the limited data on market rent and the percentage of renters suggest insufficient demand to make this a reliable investment strategy.
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.