Location: St. Louis, MO | Metro: St. Louis, MO-IL HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $980 |
| 1 Bedroom | $1,010 |
| 2 Bedrooms | $1,240 |
| 3 Bedrooms | $1,590 |
| 4 Bedrooms | $1,840 |
| 5 Bedrooms | $2,134 |
| 6 Bedrooms | $2,390 |
| 7 Bedrooms | $2,581 |
| 8 Bedrooms | $2,710 |
A skeptical investor might raise several concerns regarding investing in ZIP code 63155 in Saint Louis, Missouri. Let's address these concerns with the available data.
Will Fair Market Rent (FMR) of $1,130 cover the mortgage on a home in ZIP 63155? The median home value in the surrounding area is around $280,000 to $550,000 based on recent listings. Assuming a median home value of $400,000 and a typical mortgage rate of 4.5%, the monthly mortgage payment for a 30-year fixed-rate mortgage would be approximately $2,027. This amount is significantly higher than the FMR of $1,130. Therefore, the FMR alone would not cover the mortgage payment, necessitating additional income sources or higher rental rates to achieve financial stability.
Is there enough renter demand at the current occupancy rate? While specific occupancy rates for ZIP 63155 are not readily available, the presence of over 300 homes listed for sale indicates a vibrant real estate market. Additionally, the diverse range of property types, including houses and condos, suggests varied rental options that can cater to different segments of the population. However, without precise occupancy data, it's challenging to definitively state the level of renter demand. Nonetheless, the variety of properties and active real estate market suggest a reasonable demand for rental units.
Will vouchers keep pace with market rents? In ZIP 63155, the Fair Market Rent is set at $1,130 for FY 2024. Voucher holders typically pay 30% of their adjusted income towards rent, with the remainder covered by the voucher. If the local rental market continues to grow, it's possible that market rents could outpace the FMR. However, the Housing Choice Voucher program adjusts its rates annually based on local market conditions. To ensure that vouchers keep up with market rents, landlords should monitor the annual adjustments made by the Department of Housing and Urban Development (HUD).
In conclusion, while the FMR of $1,130 may not fully cover the mortgage on a median-priced home in ZIP 63155, the real estate market shows signs of activity and diversity. Landlords must carefully consider their investment strategy, possibly targeting lower-cost properties or seeking alternative revenue streams to balance their finances. Monitoring HUD's annual adjustments will also be crucial to gauge whether vouchers remain competitive with market rents.
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.