Location: Louisville, KY | Metro: Louisville, KY-IN HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $990 |
| 1 Bedroom | $1,080 |
| 2 Bedrooms | $1,300 |
| 3 Bedrooms | $1,660 |
| 4 Bedrooms | $1,910 |
| 5 Bedrooms | $2,216 |
| 6 Bedrooms | $2,482 |
| 7 Bedrooms | $2,681 |
| 8 Bedrooms | $2,815 |
The analysis for ZIP code 40232 in Kentucky reveals some limitations due to incomplete data. However, we can still provide a preliminary outlook based on the available figures.
The Fair Market Rent (FMR) for a two-bedroom apartment in ZIP 40232 for fiscal year 2024 is set at $1320 per month. This translates to an annual rental income of $15,840 if the property were to be leased under the Section 8 program. The median home value in this area is not provided, which makes it difficult to calculate a precise cap rate for the Section 8 scenario. Nevertheless, we can infer that the gross yield would be relatively low compared to typical market rents, given the lower monthly rates associated with Section 8.
Market rent figures are also not available, making it challenging to compare the gross yields directly. In general, market rents tend to be higher than those offered through Section 8, leading to a potentially higher gross yield for non-Section 8 properties. Without specific market rent values, however, we cannot state exact dollar amounts or percentages.
The lack of data regarding renter density and days on market (DOM) further complicates the analysis. Typically, higher renter density and shorter DOM periods indicate a more favorable environment for rental properties, including those participating in the Section 8 program. However, without these figures, we must rely on the FMR and market rent estimates to form our conclusions.
In summary, while the Section 8 program offers a guaranteed tenant base, the gross yield is likely to be lower than what could be achieved through market rents. Investors should consider this when deciding whether to participate in the program or aim for higher market-based returns. The exact financial implications remain unclear due to the missing data points, but the decision should be informed by the trade-offs between stability and potential higher returns.
Data Sources: FMR data from HUD (2027).
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.