Location: Lincoln County, KY | Metro: Boyle County, KY
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $740 |
| 1 Bedroom | $740 |
| 2 Bedrooms | $950 |
| 3 Bedrooms | $1,220 |
| 4 Bedrooms | $1,250 |
| 5 Bedrooms | $1,450 |
| 6 Bedrooms | $1,624 |
| 7 Bedrooms | $1,754 |
| 8 Bedrooms | $1,842 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $950 | $145,215 | 0.65% | D |
| 3BR | $1,220 | $208,587 | 0.58% | F |
U.S. Census Bureau data (2024)
In evaluating the investment risk for Section 8 properties in ZIP code 40440, located in Junction City, KY, several factors must be considered that could negatively impact a landlord's financial stability and operational efficiency. Firstly, tenant turnover poses a significant risk. The market rent stands at $983, while the Fair Market Rent (FMR) for fiscal year 2026 is set at $870 in the metro area. This discrepancy can lead to higher turnover rates as tenants might seek more affordable housing options that align with the FMR.
Vacancy exposure is another critical concern. With an average Days on Market (DOM) being unavailable, it is challenging to predict how long a property might remain vacant between tenancies. High vacancy periods can result in lost rental income and increased maintenance costs, especially if the property requires urgent repairs before new tenants can move in.
The deferred-maintenance exposure is also noteworthy. Given the typical home value of $192,288 and the median household income of $54,500, landlords must be prepared to handle maintenance issues promptly without relying on tenants to cover additional costs. The disparity between home values and median incomes suggests that tenants might struggle to contribute financially towards significant repairs, leaving the landlord responsible for all associated expenses.
However, these risks are somewhat mitigated by the high renter share in the area, which is 12.0%. A larger proportion of renters typically indicates a higher demand for housing vouchers, making it easier for landlords to find tenants willing to use Section 8 vouchers. This can ensure a steady stream of rental income, albeit at the FMR rate rather than the market rate.
Verdict: Moderate risk for a first-time Section 8 landlord.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.