Location: Hot Spring County, AR | Metro: Hot Springs, AR 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 | $1,110 |
| 1 Bedroom | $1,120 |
| 2 Bedrooms | $1,440 |
| 3 Bedrooms | $1,850 |
| 4 Bedrooms | $2,080 |
| 5 Bedrooms | $2,413 |
| 6 Bedrooms | $2,703 |
| 7 Bedrooms | $2,919 |
| 8 Bedrooms | $3,065 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,440 | $209,353 | 0.69% | D |
| 3BR | $1,850 | $255,791 | 0.72% | D |
| 4BR | $2,080 | $352,056 | 0.59% | F |
U.S. Census Bureau data (2024)
In analyzing the real estate investment potential in ZIP 71964, Pearcy, AR, several key points of concern arise for investors. These objections are valid and must be addressed with the available data.
Objection 1: Will FMR $960 (zip FY 2024) cover the mortgage on a $260,684 home?
The Fair Market Rent (FMR) for ZIP 71964 in fiscal year 2024 is set at $960. This figure represents the average monthly rent that a tenant might pay. However, the FMR does not directly correlate with the ability to cover a mortgage payment on a home valued at $260,684. To accurately assess this, one would need to consider the prevailing interest rates and the loan terms. Assuming a typical 30-year fixed-rate mortgage with an interest rate around 4%, the monthly mortgage payment for a home priced at $260,684 would be approximately $1,260. Thus, the FMR of $960 is insufficient to cover the mortgage payment alone. Investors should seek additional income streams or consider properties with lower purchase prices to align with the rental market.
Objection 2: Is there enough renter demand at 5.9%?
The percentage of renter-occupied housing units in ZIP 71964 is 5.9%. This indicates a relatively low demand for rentals compared to owner-occupied homes. However, this statistic alone does not provide a complete picture of the rental market dynamics. It's important to look at the total number of units and the vacancy rate. With a low percentage of renters, securing tenants might be challenging, but it also suggests that the existing rental market could be stable due to fewer competing units. Landlords should focus on maintaining high-quality properties and offering competitive amenities to attract and retain tenants.
Objection 3: Will vouchers keep pace with $1,083 market rents?
The market rent for ZIP 71964 is $1,083 per month. The Housing Choice Voucher program aims to subsidize rents up to a certain limit, which is typically close to the area median rent. However, the data does not specify if the voucher amounts will match the market rents of $1,083. Historically, voucher payments have lagged behind market rents, especially in areas experiencing rapid growth or inflation. For investors relying on vouchers, it is crucial to monitor local HUD updates and consider properties slightly below the market rent to ensure occupancy. Additionally, diversifying the tenant base beyond just voucher recipients can mitigate risks associated with subsidy limitations.
The analysis reveals that while there are challenges in the rental market of ZIP 71964, such as the gap between FMR and mortgage payments and the low percentage of renter-occupied units, these can be managed through strategic planning and property selection. The uncertainty regarding voucher amounts necessitates ongoing vigilance to adapt to any changes in subsidy policies.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.