Location: Lexington-Fayette, KY | Metro: Lexington-Fayette, KY MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,010 |
| 1 Bedroom | $1,230 |
| 2 Bedrooms | $1,450 |
| 3 Bedrooms | $2,000 |
| 4 Bedrooms | $2,160 |
| 5 Bedrooms | $2,506 |
| 6 Bedrooms | $2,807 |
| 7 Bedrooms | $3,032 |
| 8 Bedrooms | $3,184 |
The decision to invest in ZIP 40591 for Section 8 properties hinges on three key factors.
1) Does the Fair Market Rent (FMR) of $1210 cover the debt service on a property?
If you can find a property where the monthly mortgage payment plus other fixed costs do not exceed $1210, then yes, the FMR would cover your debt service. This is crucial for ensuring that your investment does not result in a cash flow deficit.
If the debt service exceeds $1210, then no, it would not be advisable to purchase a property in this ZIP code solely based on Section 8 tenants unless you can secure additional sources of income or subsidies.
2) How does the market rent compare to the FMR?
Market rent data is currently unavailable for ZIP 40591. However, if the market rent were to be higher than the FMR of $1210, it would indicate that Section 8 tenants might struggle to compete with non-subsidized renters, making it difficult to fill vacancies with Section 8 tenants.
If the market rent is equal to or slightly below the FMR, it would suggest that Section 8 tenants could easily afford to live in the area, thus creating a stable tenant pool.
3) Is there sufficient demand in the form of renters and days on the market (DOM)?
The percentage of renters and the average DOM are also not available for ZIP 40591. However, generally speaking, if the percentage of renters is high and the DOM is low, it indicates strong demand for rental properties, which is favorable for Section 8 investments.
A low percentage of renters combined with high DOM would imply weak demand, making it harder to justify an investment based on Section 8 alone.
Given the lack of specific data on market rent and the rental market dynamics, the decision to invest in ZIP 40591 for Section 8 properties will largely depend on the ability to find properties where the debt service is covered by the FMR of $1210. It also depends on the local rental market conditions, which must be researched further to ensure that there is enough demand to maintain occupancy rates.
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.