Location: Laurel County, KY | Metro: Clay County, KY
| Unit Size | Monthly FMR |
|---|---|
| Studio | $690 |
| 1 Bedroom | $740 |
| 2 Bedrooms | $970 |
| 3 Bedrooms | $1,270 |
| 4 Bedrooms | $1,270 |
| 5 Bedrooms | $1,473 |
| 6 Bedrooms | $1,650 |
| 7 Bedrooms | $1,782 |
| 8 Bedrooms | $1,871 |
U.S. Census Bureau data (2024)
A skeptical investor looking into ZIP code 40402 might have several concerns regarding the feasibility of investing in rental properties there. Let's address these concerns directly with the available data.
Objection 1: Will Fair Market Rent (FMR) of $880 (for the metro area in fiscal year 2026) cover the mortgage on a $116,333 home?
The FMR of $880 is the average amount that a tenant could pay towards rent. To determine if it covers the mortgage, we need to calculate the monthly mortgage payment. Assuming a 30-year fixed-rate mortgage at an interest rate of 4%, the monthly payment on a $116,333 home would be approximately $555. This means that the FMR of $880 is more than sufficient to cover the mortgage payment, leaving room for other expenses such as property taxes, insurance, and maintenance.
Objection 2: Is there enough renter demand at 17.3%?
The percentage of renters in ZIP 40402 is 17.3%. While this figure is relatively low compared to national averages, it does indicate a presence of rental demand. However, the data does not provide the total number of households or the number of units available for rent, which would be crucial to understanding the actual demand versus supply. Without this additional context, we can only conclude that there is some demand, but it might not be as robust as areas with higher percentages of renters.
Objection 3: Will vouchers keep pace with market rents of $519?
The question here revolves around whether the government voucher program will match the current market rents of $519. The FMR of $880 suggests that the voucher amounts are set to cover a larger portion of rent than what is currently being paid in the market. However, the data does not specify the exact amount of the vouchers or how they adjust over time. Generally, vouchers are designed to help low-income families afford housing, and while they may not always cover the full market rent, they do provide significant assistance. If the market rents remain stable or increase slightly, the gap between the voucher amount and the market rent could widen, potentially affecting the profitability of rental investments.
In summary, while the FMR of $880 is adequate to cover the mortgage on a home priced at $116,333, the lower percentage of renters and uncertainty around voucher adjustments present challenges that must be carefully considered. The data provides a snapshot but leaves gaps in understanding the full picture of rental demand and voucher dynamics in ZIP 40402.
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.