Location: Perry County, KY | Metro: Knott County, KY
| Unit Size | Monthly FMR |
|---|---|
| Studio | $740 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $1,030 |
| 3 Bedrooms | $1,230 |
| 4 Bedrooms | $1,360 |
| 5 Bedrooms | $1,578 |
| 6 Bedrooms | $1,767 |
| 7 Bedrooms | $1,908 |
| 8 Bedrooms | $2,003 |
U.S. Census Bureau data (2024)
A landlord considering purchasing property in ZIP code 41701 (Hazard, KY) for Section 8 investment must evaluate several factors to make an informed decision.
1. Does the Fair Market Rent (FMR) of $960 cover the debt service on a $106,442 property?
If the debt service on a property priced at $106,442 is less than $960 per month, then the answer is yes. The FMR of $960 would be sufficient to cover the mortgage payments and other fixed costs associated with owning the property.
If the debt service exceeds $960 per month, the answer is no. A landlord would not be able to rely solely on the FMR to sustain the financial burden of the property.
2. How does the market rent of $821 compare to the FMR?
If the market rent is below the FMR, which it is at $821, landlords can expect that Section 8 tenants will pay a higher rent compared to the average market rate. This makes the area favorable for Section 8 investments.
If the market rent were equal to or above the FMR, landlords would face competition from non-subsidized rentals, potentially making it harder to attract and retain Section 8 tenants.
3. Is there sufficient rental demand in the area?
The 37.5% of residents who are renters suggests a moderate level of demand. However, the lack of data on days on the market (DOM) means we cannot accurately assess how quickly properties are rented out. Given the existing rental population, if the property can be rented out within a reasonable timeframe, the answer is yes.
Should the DOM be excessively high, indicating slow turnover rates, the answer would be no. High DOM values could signify an oversupply of rental units or difficulty in finding suitable tenants, which would reduce the attractiveness of the investment.
In cases where the DOM is unknown but the rental population is stable, the decision would depend on additional market analysis and possibly local real estate trends. The answer here would be it depends.
Based on the provided data, the FMR of $960 is higher than the market rent of $821, making Section 8 vouchers a viable option for covering the cost of ownership. The percentage of renters at 37.5% indicates a steady demand, though the absence of DOM data introduces uncertainty. Landlords should confirm the debt service on potential properties and conduct further research into local rental dynamics before proceeding with a purchase in ZIP 41701.
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.