Location: Fayetteville-Springdale-Rogers, AR | Metro: Fayetteville-Springdale-Rogers, AR MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $910 |
| 1 Bedroom | $1,010 |
| 2 Bedrooms | $1,220 |
| 3 Bedrooms | $1,690 |
| 4 Bedrooms | $2,000 |
| 5 Bedrooms | $2,320 |
| 6 Bedrooms | $2,598 |
| 7 Bedrooms | $2,806 |
| 8 Bedrooms | $2,946 |
U.S. Census Bureau data (2024)
A landlord considering ZIP 72768 for a Section 8 investment must follow a structured decision-making process to determine if purchasing property there is financially viable. Begin with the following steps:
Step 1: Debt Service Coverage Ratio (DSCR)
The Fair Market Rent (FMR) for ZIP 72768 in fiscal year 2024 is $840. This figure must be compared against the debt service of a property valued at $253,536. If the $840 FMR can cover the monthly mortgage payments and other expenses, then the DSCR is positive, indicating that the property can sustain itself on Section 8 income. If not, the answer is No.
Step 2: Market Rent vs. FMR
The average market rent in ZIP 72768 is $928 according to the latest Census American Community Survey (ACS) data. This is above the FMR of $840. If the market rent exceeds the FMR, landlords can potentially benefit from higher rents when properties are not under Section 8 contracts, which means they might consider purchasing even if the DSCR is marginal. However, if the market rent were below the FMR, the answer would be No as the Section 8 program would not provide sufficient rental income.
Step 3: Rental Demand Analysis
The rental demand in ZIP 72768 is composed of 24.3% renters. The Days on Market (DOM) data is not available, making it difficult to assess how quickly rental units are occupied. Despite this, the percentage of renters suggests a moderate demand for rental properties. If the DSCR is positive and the market rent is above the FMR, the answer is Yes. However, if the DSCR is negative or the market rent is below the FMR, the answer remains No.
If the DSCR is positive but close to breaking even, and the market rent is above the FMR, the decision shifts to an It Depends scenario. Here, landlords must weigh the potential benefits of slightly higher market rents against the risks of lower occupancy rates or longer DOM periods. They should also consider the overall economic health of the area, local vacancy rates, and the likelihood of maintaining a steady stream of Section 8 tenants.
In summary, for ZIP 72768, the financial viability hinges on the ability of the $840 FMR to cover the debt service of a $253,536 property, the relationship between the market rent ($928) and the FMR, and the strength of rental demand given the available data. A positive DSCR and market rent above the FMR lean towards a Yes, while a negative DSCR or market rent below the FMR leads to a No. In cases where the DSCR is marginally positive and the market rent is above the FMR, the decision ultimately depends on additional factors not covered by the provided data.
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.