Location: Tulsa, OK | Metro: Lincoln County, OK HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $720 |
| 1 Bedroom | $770 |
| 2 Bedrooms | $940 |
| 3 Bedrooms | $1,230 |
| 4 Bedrooms | $1,440 |
| 5 Bedrooms | $1,670 |
| 6 Bedrooms | $1,870 |
| 7 Bedrooms | $2,020 |
| 8 Bedrooms | $2,121 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 74028 provides insight into potential investment returns. Based on the Fair Market Rent (FMR) for a 2-bedroom apartment set at $890 per month for fiscal year 2024, the annualized rental income would be $10,680. In contrast, the market rent for a similar unit stands at $963 per month, translating to an annual income of $11,556.
To derive the gross yield, we compare these figures against the median home value of $243,780. For the Section 8 scenario, the gross yield is calculated as follows:
$10,680 / $243,780 = 0.0438 or 4.38%
This represents the implied gross yield if the property were rented under Section 8 guidelines. For the market rent scenario, the calculation is:
$11,556 / $243,780 = 0.0474 or 4.74%
The difference between these yields is significant, with the market rent scenario offering a higher gross yield. However, the choice between these two options must consider the local rental market dynamics and the specific characteristics of the investment property.
In ZIP 74028, the renter density is 19.4%, indicating that a relatively small portion of the population is renting. This suggests that there might be limited demand for rental properties, particularly those under Section 8. The fact that the days on market (DOM) is listed as N/A implies either insufficient data or that rentals in this area move quickly once listed, which could support higher market rents.
Given the lower renter density, it is likely that landlords would prefer the higher market rent scenario, as it offers a better gross yield and potentially less administrative burden associated with Section 8 tenancy. However, for investors specifically interested in Section 8 properties, the 4.38% gross yield is a realistic expectation, considering the guaranteed income and tenant support through government subsidies.
In conclusion, while the market rent scenario presents a more favorable gross yield at 4.74%, the Section 8 scenario remains viable at 4.38%. Investors should weigh the benefits of each approach against their investment goals and risk tolerance.
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.