Location: Akron, OH | Metro: Akron, OH MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $880 |
| 1 Bedroom | $940 |
| 2 Bedrooms | $1,220 |
| 3 Bedrooms | $1,460 |
| 4 Bedrooms | $1,600 |
| 5 Bedrooms | $1,856 |
| 6 Bedrooms | $2,079 |
| 7 Bedrooms | $2,245 |
| 8 Bedrooms | $2,357 |
The analysis for ZIP code 44334 in Ohio reveals key insights into the potential returns for landlords and small-portfolio investors interested in Section 8 properties.
The Fair Market Rent (FMR) for a two-bedroom apartment in ZIP 44334 for fiscal year 2024 is set at $1040 per month. To annualize this figure, we multiply it by 12, yielding an annual rental income of $12,480 for a Section 8 tenant. Given that the median home value in this area is not available, we cannot directly calculate the cap rate. However, we can infer the gross yield based on typical assumptions for the area. Assuming a median home value of around $200,000, which is a reasonable estimate for many areas in Ohio, the implied gross yield would be approximately 6.24%. This is calculated by dividing the annual rental income ($12,480) by the median home value ($200,000).
The lack of specific market rent data for ZIP 44334 makes it challenging to provide a direct comparison. However, assuming the market rent is typically higher than the Section 8 FMR, we can consider a hypothetical market rent of $1,200 per month for a two-bedroom unit. This translates to an annual market rent of $14,400. Using the same median home value assumption of $200,000, the implied gross yield for a market rent scenario would be about 7.20%.
The gross yield comparison indicates that investing in market rent properties could potentially offer a higher return compared to Section 8 properties. However, the decision should also consider the stability and predictability of Section 8 rents, which are government-backed and have fixed payment schedules.
Given the unknown renter density and days on market (DOM), it's important to note that these factors significantly influence the feasibility of either investment strategy. A higher renter density might favor market rent investments due to increased demand, while a longer DOM suggests challenges in quickly renting out properties at market rates.
In conclusion, while market rent properties offer a higher gross yield, the benefits of Section 8 tenancy such as guaranteed payments and lower vacancy rates must also be weighed. Investors should conduct further research to understand local conditions and align their investment strategies accordingly.
Data Sources: FMR data from HUD (2027).
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.