Location: Ohio County, KY | Metro: Butler County, KY HUD Metro FMR Area
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $660 |
| 1 Bedroom | $700 |
| 2 Bedrooms | $920 |
| 3 Bedrooms | $1,190 |
| 4 Bedrooms | $1,430 |
| 5 Bedrooms | $1,659 |
| 6 Bedrooms | $1,858 |
| 7 Bedrooms | $2,007 |
| 8 Bedrooms | $2,107 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,190 | $213,834 | 0.56% | F |
U.S. Census Bureau data (2024)
The potential risks for investing in Section 8 properties in ZIP code 42320 are significant and should be carefully considered. Tenant turnover is a primary concern, as the market rent of $745 is notably lower than the Fair Market Rent (FMR) of $870 for fiscal year 2024. This discrepancy suggests that tenants may prefer higher-rent properties outside the Section 8 program, leading to increased turnover and associated costs.
Vacancy exposure is another issue. With no data available on the days on market (DOM), it's challenging to predict how long properties might remain vacant between tenants. Vacancies can significantly impact cash flow, especially when considering the maintenance and operational costs that continue even without tenants.
Deferred maintenance is also a risk, particularly given the typical home value of $150,692 and a median income of $54,730. Landlords may find themselves responsible for extensive repairs and upgrades to meet Section 8 standards, which can be costly and time-consuming. The financial strain of these obligations could be exacerbated by the relatively low median income in the area, indicating that residents might struggle to afford substantial rent increases.
However, the high renter share of 27.3% in ZIP 42320 presents an opportunity. High renter density typically correlates with greater demand for rental assistance vouchers, such as those offered through the Section 8 program. This means that while there are risks, there is also a strong likelihood of finding tenants who qualify for and are willing to use Section 8 vouchers, ensuring a steady stream of rental income.
Verdict: Moderate risk for a first-time Section 8 landlord.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.