Location: Knott County, KY | Metro: Knott County, KY
| Unit Size | Monthly FMR |
|---|---|
| Studio | $700 |
| 1 Bedroom | $780 |
| 2 Bedrooms | $980 |
| 3 Bedrooms | $1,170 |
| 4 Bedrooms | $1,370 |
| 5 Bedrooms | $1,589 |
| 6 Bedrooms | $1,780 |
| 7 Bedrooms | $1,922 |
| 8 Bedrooms | $2,018 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate picture for ZIP 41828 in Topmost, KY, is defined by a median home value of $73,002 and an average monthly rent of $783. Given the annualized Fair Market Rent (FMR) for a 2BR apartment is $870 (FY 2026), we can derive two scenarios for gross yield.
In the first scenario, using the annualized FMR of $870, the implied gross yield would be approximately 14.5%. This calculation is derived from the annual rent ($870) divided by the median home value ($73,002).
In the second scenario, using the market rent of $783, the implied gross yield is about 12.9%. This figure aligns with the data provided, indicating a strong rental yield potential relative to the median home value.
Given the 16.5% renter density and the lack of specific Days on Market (DOM) data, the second scenario using the market rent of $783 appears more realistic. The high vacancy rate of 26.2% suggests that finding tenants might be easier, but it also indicates a challenge in maintaining occupancy rates. Additionally, the declining home values over the past year (-15.2%) and the elevated poverty rate (25.7%) could affect rent collection and long-term appreciation.
The cap rate of 8.4%, which exceeds the current 30-year mortgage rate of 6.3%, suggests that leveraging can enhance returns. However, investors should focus on operational excellence, including pro forma discipline, capital expenditure reserves, and strong lender relationships, rather than relying solely on market metrics.
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.