Location: Dallas, TX | Metro: Dallas, TX HUD Metro FMR Area
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 | $1,320 |
| 1 Bedroom | $1,360 |
| 2 Bedrooms | $1,600 |
| 3 Bedrooms | $2,010 |
| 4 Bedrooms | $2,560 |
| 5 Bedrooms | $2,970 |
| 6 Bedrooms | $3,326 |
| 7 Bedrooms | $3,592 |
| 8 Bedrooms | $3,772 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,010 | $326,885 | 0.61% | D |
| 4BR | $2,560 | $354,821 | 0.72% | D |
| 5BR | $2,970 | $378,308 | 0.79% | D |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate picture for ZIP code 75173 reveals some interesting insights for landlords and small-portfolio investors. To start, let's annualize the Fair Market Rent (FMR) for a 2-bedroom apartment, which is set at $1610 per month for FY 2024. This translates into an annual rental income of $19,320. Comparatively, the market rent for a similar property stands at $1,426 per month based on Census ACS data, equating to an annual rental income of $17,112.
Using these figures, we can calculate the implied gross yield for both scenarios. For the Section 8 scenario, the gross yield is calculated by dividing the annualized FMR by the median home value. With a median home value of $344,547, the implied gross yield for a Section 8 property is approximately 5.61%. In contrast, using the market rent figure, the implied gross yield drops slightly to around 4.97%.
Given the 5.5% renter density in ZIP 75173, it's important to note that the actual occupancy rates could vary. The N/A-day DOM (Days On Market) suggests that there might be limited data available on how quickly properties are rented out, which could affect the overall yield. However, considering the higher monthly rent under Section 8, the 5.61% gross yield scenario appears more favorable for landlords and investors looking to secure stable, government-backed rental income.
While the market rent scenario offers a slightly lower gross yield, it's still a viable option for those who prefer flexibility over guaranteed income. The key difference lies in the predictability of rental income; Section 8 tenants provide a steady stream of payments, albeit subject to federal guidelines and regulations. For those willing to navigate these guidelines, the higher gross yield under Section 8 represents a stronger return on investment compared to the market rate.
In conclusion, for ZIP 75173, the Section 8 program presents a more attractive gross yield at 5.61%, driven by the higher annualized FMR of $19,320. This is contrasted with the market rent scenario, which yields 4.97% annually. Investors should weigh the benefits of a higher, albeit regulated, income stream against the potential risks and rewards of market-rate rentals.
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.