Location: Rowan County, KY | Metro: Rowan County, KY
| Unit Size | Monthly FMR |
|---|---|
| Studio | $700 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $980 |
| 3 Bedrooms | $1,260 |
| 4 Bedrooms | $1,640 |
| 5 Bedrooms | $1,902 |
| 6 Bedrooms | $2,130 |
| 7 Bedrooms | $2,300 |
| 8 Bedrooms | $2,415 |
The analysis for ZIP code 40319 in Unknown, Kentucky, presents some challenges due to limited data availability. However, we can still derive a rough picture of the potential Section 8 cap rate based on the Fair Market Rent (FMR) and available market rent figures.
The annualized 2BR FMR for FY 2026 in the metro area is $910 per month. Assuming this represents the rental income that could be generated from a property participating in the Section 8 program, the annual rent would be $10,920. Without a specific median home value for ZIP 40319, it's difficult to calculate an exact cap rate, but we can estimate the gross yield. If we assume a typical median home value for similar areas, let's use $150,000 as a hypothetical figure. The gross yield in this scenario would be approximately 7.3% ($10,920 / $150,000).
The market rent is listed as N/A, which suggests there isn't enough data to determine a reliable figure. However, if we were to consider a higher gross yield based on market conditions, a common benchmark for small-portfolio investors might be around 10%. This would imply a monthly market rent of about $1,250, leading to an annual rent of $15,000. Using the same hypothetical median home value of $150,000, the gross yield would be 10% ($15,000 / $150,000).
The lack of specific data on renter density and days on market (DOM) complicates the analysis further. However, a general rule of thumb is that lower gross yields are more common in areas with higher renter density and longer DOM periods, indicating a less favorable market for rental properties. Given the N/A status of these metrics, it's reasonable to infer that the actual market conditions could vary widely.
In conclusion, the Section 8 scenario with a gross yield of 7.3% is likely more conservative and realistic compared to the hypothetical market rent scenario of 10%. Landlords and investors should consider the risks and benefits of each scenario carefully, taking into account the stability of Section 8 payments versus the potential for higher market rents. The choice between the two depends largely on the individual's investment goals and risk tolerance.
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.