Location: Harlan County, KY | Metro: Harlan County, KY
| Unit Size | Monthly FMR |
|---|---|
| Studio | $690 |
| 1 Bedroom | $750 |
| 2 Bedrooms | $910 |
| 3 Bedrooms | $1,190 |
| 4 Bedrooms | $1,190 |
| 5 Bedrooms | $1,380 |
| 6 Bedrooms | $1,546 |
| 7 Bedrooms | $1,670 |
| 8 Bedrooms | $1,754 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 40824 reveals interesting insights for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a two-bedroom apartment in ZIP 40824, as set by HUD for fiscal year 2026, is $870 per month. This translates to an annualized rental income of $10,440. In contrast, the Census ACS reports a market rent of $588 per month, equating to an annual income of $7,056.
To derive the implied gross yield, we need to consider the median home value in the area. However, the median home value for ZIP 40824 is currently not available. Without this data, we cannot calculate a precise cap-rate. Nevertheless, we can still compare the gross yields based on the annualized rents.
The implied gross yield using the FMR would be higher, at approximately $10,440 annually, while the gross yield based on market rent would be lower, at about $7,056 annually. Given that the renter density in ZIP 40824 is 39.2%, it suggests a significant portion of the population is likely to be interested in Section 8 housing. This makes the FMR scenario more realistic for investors looking to secure long-term tenants through the Section 8 program.
The lack of available Days on Market (DOM) data further complicates a detailed analysis, but the higher gross yield from the FMR is a stronger indicator for potential returns. Landlords should weigh these figures against their own operating costs and vacancy rates to determine the viability of participating in the Section 8 program in this ZIP code.
In conclusion, the Section 8 scenario offers a more robust annual rental income compared to the market rent. For ZIP 40824, the FMR-based gross yield of $10,440 is preferable over the market rent-based gross yield of $7,056, especially considering the substantial renter density in the area.
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.