Location: Carter County, KY | Metro: Carter County, KY HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $730 |
| 1 Bedroom | $750 |
| 2 Bedrooms | $910 |
| 3 Bedrooms | $1,250 |
| 4 Bedrooms | $1,280 |
| 5 Bedrooms | $1,485 |
| 6 Bedrooms | $1,663 |
| 7 Bedrooms | $1,796 |
| 8 Bedrooms | $1,886 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 41142 presents a unique challenge due to limited data availability. The Fair Market Rent (FMR) for a two-bedroom apartment in this area for fiscal year 2024 is set at $860 per month. To annualize this figure, we multiply it by 12, resulting in an annual rental income of $10,320 for a property that qualifies under the Section 8 program.
Unfortunately, the market rent for ZIP 41142 is not available, making direct comparisons difficult. However, for the sake of analysis, let's consider the median home value is also not provided, which means we cannot calculate a precise gross yield based on typical market rents. In the absence of market rent data, the gross yield calculation relies solely on the Section 8 FMR.
To derive the implied gross yield using the Section 8 FMR, we would need the purchase price of a comparable two-bedroom property. Given the lack of median home value, let's assume a hypothetical purchase price to illustrate the concept. If a property were purchased for $150,000, the annual rental income of $10,320 would translate into a gross yield of approximately 6.9%. This is calculated by dividing the annual rental income ($10,320) by the purchase price ($150,000).
With a renter density of 0.0%, it's evident that there are few if any Section 8 tenants in the area. This low density suggests that properties relying on Section 8 subsidies might struggle to find qualified tenants, potentially leading to longer vacancy periods. Additionally, the day-on-market (DOM) data being not available indicates that there is insufficient information to gauge how quickly properties are typically rented out in this area.
Given these constraints, the gross yield derived from the Section 8 FMR appears to be the most concrete figure we can work with. While it provides a baseline for potential income, the lack of market rent data makes it challenging to assess whether this yield is competitive or realistic compared to other investment opportunities in the area. Investors should consider these limitations and seek additional local insights before making decisions based on this analysis.
In summary, the implied gross yield from the Section 8 FMR for a two-bedroom property in ZIP 41142, assuming a $150,000 purchase price, is 6.9%. Due to the scarcity of market rent data and the extremely low renter density, this yield should be treated as a conservative estimate until more comprehensive data becomes available.
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.