Location: Lexington-Fayette, KY | Metro: Lexington-Fayette, KY MSA
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 | $1,180 |
| 1 Bedroom | $1,440 |
| 2 Bedrooms | $1,690 |
| 3 Bedrooms | $2,330 |
| 4 Bedrooms | $2,520 |
| 5 Bedrooms | $2,923 |
| 6 Bedrooms | $3,274 |
| 7 Bedrooms | $3,536 |
| 8 Bedrooms | $3,713 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,690 | $223,558 | 0.76% | D |
| 3BR | $2,330 | $329,436 | 0.71% | D |
| 4BR | $2,520 | $479,139 | 0.53% | F |
| 5BR | $2,923 | $649,448 | 0.45% | F |
U.S. Census Bureau data (2024)
The analysis of ZIP 40515 in Lexington, KY, reveals key insights for landlords and small-portfolio investors. First, let's examine if the rent math works. The Fair Market Rent (FMR) for ZIP 40515 in fiscal year 2024 is set at $1,380, while the market rent as measured by Zillow's Observed Rental Index (ZORI) stands at $1,495. This indicates that landlords can expect to charge slightly above the FMR, providing a modest profit margin.
Regarding acquisition affordability, the median home value in ZIP 40515 is $380,621. With an average of 11 days on the market (DOM) and only 0.2% of homes needing a price cut, it suggests that the market is relatively stable and homes are selling quickly without significant discounts. This environment is favorable for acquiring properties at fair market values, especially since the low price-cut share implies that sellers are generally able to achieve their asking prices.
Tenant demand is strong in ZIP 40515. With a total population of 37,384 and 39.5% of residents being renters, there is a substantial pool of potential tenants. This high renter share ensures a steady demand for rental properties, which is crucial for maintaining occupancy rates and ensuring a reliable income stream for landlords.
In summary, the rent math in ZIP 40515 supports a positive outlook for landlords, with market rents exceeding FMR. Acquisition costs are reasonable given the median home value, and the quick sales and minimal need for price adjustments indicate a healthy housing market. Strong tenant demand, driven by a significant renter population, further solidifies the attractiveness of this area for real estate investment. Landlords and small-portfolio investors should find ZIP 40515 a profitable and stable market to invest in.
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.