Location: Johnson County, AR | Metro: Franklin County, AR
| Unit Size | Monthly FMR |
|---|---|
| Studio | $690 |
| 1 Bedroom | $690 |
| 2 Bedrooms | $910 |
| 3 Bedrooms | $1,140 |
| 4 Bedrooms | $1,490 |
| 5 Bedrooms | $1,728 |
| 6 Bedrooms | $1,935 |
| 7 Bedrooms | $2,090 |
| 8 Bedrooms | $2,195 |
U.S. Census Bureau data (2024)
A skeptical investor considering ZIP 72821 might have several concerns regarding the feasibility of investing in Section 8 properties. Let's address these concerns with the available data.
Objection 1: Will FMR $810 (zip FY 2024) cover the mortgage on a $127,496 home?
The Fair Market Rent (FMR) for ZIP 72821 is set at $810 for FY 2024. To determine if this will sufficiently cover the mortgage on a property valued at $127,496, we need to consider the typical mortgage rates and terms. Assuming a standard 30-year fixed-rate mortgage at an interest rate of around 4%, the monthly mortgage payment for a $127,496 home would be approximately $610. The FMR of $810 comfortably exceeds this amount, providing a buffer that can be used to cover maintenance costs, insurance, and other expenses associated with owning a rental property. Therefore, the FMR should adequately cover the mortgage payments on a $127,496 home.
Objection 2: Is there enough renter demand at 24.3%?
Renter demand in ZIP 72821 is measured at 24.3%. This figure represents the percentage of households that are renters. While this might seem low compared to some urban areas, it indicates a steady demand for rental units. A 24.3% rental rate suggests that there are sufficient tenants interested in renting properties in this area. However, the data does not provide specifics on the number of Section 8 tenants or the competition for such vouchers. It's important to conduct further research into the local housing market dynamics to ensure that the demand for Section 8 rentals is strong enough to sustain occupancy.
Objection 3: Will vouchers keep pace with $716 market rents?
The average market rent in ZIP 72821 is $716, which is slightly below the FMR of $810. The primary concern here is whether the voucher amounts will increase in line with market rents. Unfortunately, the data provided does not include projections for future voucher amounts. Historically, voucher amounts have been adjusted based on federal guidelines and local market conditions, but these adjustments are often slow to respond to rapid changes in the housing market. Investors should monitor both local and national trends to anticipate potential discrepancies between voucher amounts and market rents.
In conclusion, while the FMR of $810 provides a solid financial foundation for covering mortgage payments on a $127,496 home, the 24.3% rental rate suggests a stable demand for rental properties. However, the long-term sustainability of investments in Section 8 properties in ZIP 72821 depends on the alignment of voucher amounts with market rents, which requires ongoing attention to housing market trends.
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.