Location: Sherman-Denison, TX | Metro: Sherman-Denison, TX 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 | $1,140 |
| 2 Bedrooms | $1,410 |
| 3 Bedrooms | $1,950 |
| 4 Bedrooms | $2,170 |
| 5 Bedrooms | $2,517 |
| 6 Bedrooms | $2,819 |
| 7 Bedrooms | $3,045 |
| 8 Bedrooms | $3,197 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,410 | $176,311 | 0.8% | D |
| 3BR | $1,950 | $268,159 | 0.73% | D |
| 4BR | $2,170 | $343,652 | 0.63% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 75092 in Sherman, TX, provides a detailed look into the potential returns for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a 2-bedroom apartment in ZIP 75092 for FY 2024 is set at $1,280 per month, while the Zillow Observed Rent Index (ZORI) indicates a market rent of $1,375 per month. To derive the cap-rate, we must first annualize these figures.
The annualized FMR for a 2-bedroom unit is $15,360 ($1,280 x 12 months), and the ZORI annualized rent is $16,500 ($1,375 x 12 months). Given the median home value in ZIP 75092 is $291,264, we can calculate the implied gross yield for both scenarios. For the FMR scenario, the gross yield is approximately 5.27%, calculated as $15,360 divided by $291,264. In the case of market rent, the gross yield increases to about 5.67%, calculated as $16,500 divided by $291,264.
Considering the 41.9% renter density in ZIP 75092, it's evident that there is a substantial demand for rental properties. However, the Days on Market (DOM) statistic, which stands at 71 days, suggests that it takes a considerable amount of time to secure a tenant. This implies that landlords might face challenges in maintaining a consistent occupancy rate, especially when relying solely on Section 8 vouchers.
The FMR scenario offers a more conservative estimate of the gross yield, reflecting the government-set limits on what tenants can pay. While the market rent scenario presents a slightly higher gross yield, it is important to note that achieving this level of rent may be difficult due to the high DOM and the significant portion of the population dependent on rental assistance programs.
In conclusion, while the market rent scenario offers a gross yield of 5.67%, the FMR scenario, with its gross yield of 5.27%, is likely more realistic given the conditions in ZIP 75092. Landlords should prepare for potentially longer vacancy periods and consider the balance between higher yields and the practical realities of securing and retaining tenants in this area.
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.