Location: Graves County, KY | Metro: Calloway County, KY
| Unit Size | Monthly FMR |
|---|---|
| Studio | $750 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $1,040 |
| 3 Bedrooms | $1,310 |
| 4 Bedrooms | $1,410 |
| 5 Bedrooms | $1,636 |
| 6 Bedrooms | $1,832 |
| 7 Bedrooms | $1,979 |
| 8 Bedrooms | $2,078 |
U.S. Census Bureau data (2024)
A landlord considering investing in ZIP code 42040 for Section 8 should follow this decision tree:
1) Does the Fair Market Rent (FMR) of $990 cover the debt service on a property valued at $195,710?
Yes. The FMR of $990 is designed to ensure that it covers the basic costs associated with renting a property, including mortgage payments, maintenance, insurance, and other expenses. This means that if you can acquire a property for $195,710 or less, the FMR should theoretically clear your debt service, allowing you to break even or make a profit depending on your financing terms.
No. If you cannot find properties in ZIP 42040 that are priced at or below $195,710, then the FMR of $990 will likely not be sufficient to cover your debt service. In this case, you would need to reconsider your investment strategy or look into other areas where the FMR aligns better with property values.
2) How does the market rent compare to the FMR?
Market rent is above FMR. If the local market rents exceed the FMR of $990, then there might be an opportunity to charge higher rents outside of Section 8. However, this also indicates that Section 8 tenants may struggle to afford market rates, potentially limiting demand from this source.
Market rent is at or below FMR. If the market rents are at or below the FMR, then Section 8 vouchers should cover the typical rental price in the area, making it easier to attract tenants. This scenario suggests a higher likelihood of success for landlords seeking to participate in the Section 8 program.
3) Is there enough demand for Section 8 properties?
Yes. With 9.4% of the population being renters and the days on market (DOM) being N/A, indicating either a very active market or insufficient data, there is likely sufficient demand for rental properties. This supports the viability of investing in Section 8 properties within ZIP 42040.
No. If the percentage of renters is lower or the DOM is significantly high, suggesting difficulty in finding tenants quickly, then the demand for Section 8 properties may be insufficient. This would make it challenging to maintain occupancy and could lead to financial strain.
It depends. Given that the DOM figure is currently N/A, it's difficult to assess how quickly properties are rented out. You would need to gather more localized data on rental vacancy rates and tenant turnover to determine if the demand is robust enough to support Section 8 investments.
In conclusion, if you can find properties under or around $195,710, and market rents are at or below the FMR, then ZIP 42040 presents a viable option for Section 8 investment. However, the lack of DOM data requires further investigation to confirm the strength of the rental market and the demand for Section 8 properties.
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.