Location: Shreveport-Bossier City, LA | Metro: Shreveport-Bossier City, LA MSA
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 | $1,000 |
| 1 Bedroom | $1,120 |
| 2 Bedrooms | $1,260 |
| 3 Bedrooms | $1,660 |
| 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 |
|---|---|---|---|---|
| 2BR | $1,260 | $127,159 | 0.99% | C |
| 3BR | $1,660 | $236,222 | 0.7% | D |
| 4BR | $1,750 | $344,378 | 0.51% | F |
| 5BR | $2,030 | $462,067 | 0.44% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP 71037 (Haughton, LA) reveals some interesting dynamics between the Federal Market Rent (FMR) and the actual market rents. For a two-bedroom property, the annualized FMR for FY 2024 is $1160, while the Zillow Observed Rental Index (ZORI) stands at $1,588.
To calculate the gross yield, we first consider the FMR scenario. With an FMR of $1160 per month, the annual rent would be $13,920. Given the median home value of $254,224, the implied gross yield based on the FMR is approximately 5.47%. This is derived by dividing the annual rent by the median home value: $13,920 / $254,224 = 0.0547 or 5.47%.
Moving to the market rent scenario using ZORI, the monthly market rent is $1,588, leading to an annual rent of $19,056. The implied gross yield based on the market rent is about 7.5%, calculated as $19,056 / $254,224 = 0.075 or 7.5%.
Given the 14.1% renter density and a 51-day Days on Market (DOM), it's clear that the market rent scenario is more realistic. A DOM of 51 days indicates a relatively quick turnover, suggesting that properties rented at the market rate of $1,588 are likely to find tenants faster than those rented at the lower FMR rate. Moreover, the higher gross yield of 7.5% provides a better return on investment compared to the 5.47% yield from the FMR scenario.
While the FMR provides a safety net for tenants, landlords should aim for the market rent to maximize their returns. The difference in gross yields between the two scenarios highlights the financial benefits of renting at the market rate. However, it's important to note that the FMR scenario might still be relevant for certain situations where tenants have limited income options or prefer subsidized housing.
In conclusion, for ZIP 71037, the market rent scenario offers a more practical outlook for landlords and small-portfolio investors, with a higher gross yield and quicker occupancy rates. This aligns with the local rental market dynamics and tenant preferences.
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.