Location: Baton Rouge, LA | Metro: Baton Rouge, LA HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $930 |
| 1 Bedroom | $960 |
| 2 Bedrooms | $1,090 |
| 3 Bedrooms | $1,360 |
| 4 Bedrooms | $1,750 |
| 5 Bedrooms | $2,030 |
| 6 Bedrooms | $2,274 |
| 7 Bedrooms | $2,456 |
| 8 Bedrooms | $2,579 |
U.S. Census Bureau data (2024)
A skeptical investor might raise several concerns regarding the feasibility of investing in ZIP code 70752, particularly related to the Fair Market Rent (FMR), renter demand, and the adequacy of housing vouchers.
Objection 1: Will FMR $1150 cover the mortgage on a $165,500 home?
The median home value in ZIP 70752 is $165,500. Assuming a typical mortgage rate of around 4%, the monthly payment on a $165,500 home could be approximately $780, based on a 30-year fixed-rate mortgage. Given that the FMR for ZIP 70752 is $1150, it would indeed cover the mortgage payment, leaving a margin for maintenance and other expenses.
Objection 2: Is there enough renter demand at 2.3%?
The rental vacancy rate in ZIP 70752 is 2.3%, which indicates a very low vacancy rate and strong rental demand. However, the data does not provide the number of rental units available. This suggests that while demand is robust, the supply of rental properties is limited. It is important to note that a low vacancy rate can also indicate a tight market, where finding tenants might still be challenging due to competition among existing properties.
Objection 3: Will vouchers keep pace with the market rents?
The data does not specify the exact amount of housing vouchers or how they correlate with the local market rents. However, given the relatively lower median home value compared to the national average ($281,900), it is plausible that housing vouchers might be more effective in covering the cost of living in ZIP 70752. To ensure that vouchers keep pace with market rents, it would be prudent to monitor local housing authority announcements and federal updates on voucher amounts.
In conclusion, while the data supports the idea that FMR covers the mortgage and indicates strong rental demand, the lack of detailed information on voucher amounts and the number of rental units makes it difficult to fully assess these aspects. A thorough analysis of local market conditions and tenant profiles would be advisable before making any investment decisions.
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.