Location: Jefferson City, MO | Metro: Jefferson City, MO HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $730 |
| 1 Bedroom | $740 |
| 2 Bedrooms | $960 |
| 3 Bedrooms | $1,330 |
| 4 Bedrooms | $1,550 |
| 5 Bedrooms | $1,798 |
| 6 Bedrooms | $2,014 |
| 7 Bedrooms | $2,175 |
| 8 Bedrooms | $2,284 |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $800 for ZIP 65024 will sufficiently cover the mortgage on a home valued at $227,173. To evaluate this, we must consider current mortgage rates and the typical loan-to-value ratio. Assuming a standard 30-year fixed-rate mortgage at a hypothetical rate of 5%, the monthly principal and interest payment on a $227,173 home would be approximately $1,220. This figure exceeds the $800 FMR, indicating that the rent alone would not cover the mortgage. However, this analysis does not account for potential tax benefits or appreciation of the property.
The objection regarding the low renter demand at 9.7% is valid. With such a low vacancy rate, it suggests limited competition among landlords, which could impact the ability to attract and retain tenants. The median home value in ZIP 65024 is significantly lower than the $227,173 home mentioned ($94,500), implying that higher-priced homes might struggle to find renters willing to pay the FMR. This could necessitate offering discounts or amenities to attract tenants.
The concern over whether Section 8 vouchers will keep pace with market rents of $631 is pertinent. According to recent data, the voucher amount in ZIP 65024 is $800, which is above the market rent. This indicates that vouchers are likely to cover the cost of renting in this area, potentially providing a stable source of income for landlords who accept them. However, the data does not specify if these amounts are adjusted annually or how they will evolve in the future.
In summary, while the FMR of $800 may not cover the mortgage on a $227,173 home, the Section 8 voucher amount appears to exceed the market rent. The low vacancy rate of 9.7% poses a challenge in terms of tenant acquisition but also suggests a relatively stable rental market. It is important to note that the data available does not provide a complete picture of future trends or adjustments in voucher amounts.
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.