Location: Cincinnati, OH | Metro: Cincinnati, OH-KY-IN HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,020 |
| 1 Bedroom | $1,100 |
| 2 Bedrooms | $1,400 |
| 3 Bedrooms | $1,840 |
| 4 Bedrooms | $2,080 |
| 5 Bedrooms | $2,413 |
| 6 Bedrooms | $2,703 |
| 7 Bedrooms | $2,919 |
| 8 Bedrooms | $3,065 |
The analysis of the Section 8 cap-rate scenario for ZIP code 45201 in Ohio reveals some key insights. The Fair Market Rent (FMR) for a two-bedroom apartment in fiscal year 2024 is set at $1150 per month. To derive the annualized FMR, we multiply this figure by 12, yielding an annual rental income of $13,800.
However, the median home value and market rent for ZIP 45201 are not available, which complicates a direct comparison. Assuming a hypothetical median home value of $200,000 for the sake of illustration, the implied gross yield from Section 8 would be 6.9%. This calculation is based on the annual rental income divided by the median home value.
In the absence of market rent data, we cannot provide an exact gross yield for market rents. However, if we assume that market rents are higher than the FMR, the gross yield would likely exceed 6.9%, potentially offering a better return on investment.
The lack of specific data on renter density and days on market (DOM) makes it difficult to determine which scenario is more realistic. Typically, a higher renter density suggests a greater demand for rentals, while a lower DOM indicates quicker property turnover. Both factors can influence the attractiveness of the Section 8 program versus market rents.
To conclude, the Section 8 program in ZIP 45201 offers a predictable gross yield of 6.9%, assuming a median home value of $200,000. Market rents, when available, could provide a higher gross yield, reflecting a more competitive rental environment. Investors should consider these factors along with local rental trends and vacancy rates to make informed decisions.
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.