Location: Lafayette, LA | Metro: Lafayette, LA 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 | $910 |
| 1 Bedroom | $1,060 |
| 2 Bedrooms | $1,190 |
| 3 Bedrooms | $1,500 |
| 4 Bedrooms | $1,750 |
| 5 Bedrooms | $2,030 |
| 6 Bedrooms | $2,274 |
| 7 Bedrooms | $2,456 |
| 8 Bedrooms | $2,579 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,500 | $243,988 | 0.61% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 70503 reveals a detailed snapshot of rental income potential versus property values. The Fair Market Rent (FMR) for a two-bedroom apartment in fiscal year 2024 is set at $1220 per month, while the Zillow Observed Rent Index (ZORI) indicates a market rent of $1267 monthly. With a median home value of $279,952, these figures can be annualized to calculate the gross yield.
First, let's annualize the FMR. Multiplying the monthly rate of $1220 by 12 gives an annual rental income of $14,640. This translates to a gross yield of approximately 5.23% when compared to the median home value ($14,640 / $279,952).
Next, we annualize the market rent figure. At $1267 per month, the annual rental income becomes $15,204. This results in a gross yield of about 5.43% relative to the median home value ($15,204 / $279,952).
The difference between the two yields is marginal, with the market rent scenario offering a slightly higher gross yield. However, considering the 34.3% renter density and the 38-day Days on Market (DOM), the FMR scenario is more likely to reflect the actual rental income potential in ZIP 70503. A higher DOM suggests that properties take longer to rent out, which could indicate a saturation of the market or difficulty in finding tenants willing to pay above the FMR.
In conclusion, while the market rent offers a marginally better gross yield, the reality of the rental market in ZIP 70503 leans towards the FMR-based yield being more reflective of what landlords and small-portfolio investors can expect. The lower gross yield of 5.23% based on the FMR is more practical given the local conditions.
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.