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 | $1,840 |
| 1 Bedroom | $1,900 |
| 2 Bedrooms | $2,230 |
| 3 Bedrooms | $2,810 |
| 4 Bedrooms | $3,570 |
| 5 Bedrooms | $4,141 |
| 6 Bedrooms | $4,638 |
| 7 Bedrooms | $5,009 |
| 8 Bedrooms | $5,259 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,230 | $203,340 | 1.1% | B |
| 3BR | $2,810 | $262,521 | 1.07% | B |
| 4BR | $3,570 | $305,290 | 1.17% | B |
| 5BR | $4,141 | $368,861 | 1.12% | B |
U.S. Census Bureau data (2024)
The classification of ZIP code 75407 in Princeton, TX, hinges on the balance between yield and stability. With a Fair Market Rent (FMR) of $1,980 for fiscal year 2024 compared to a market rent of $1,940, and an average home value of $293,529, the yield potential is modest but present. The FMR suggests that properties can be rented at slightly higher rates than the current market, offering a small margin of profit for landlords.
On the stability axis, several factors come into play. First, only 23.8% of residents are renters, which indicates a lower demand for rental properties. Second, the days on market (DOM) is 50, which is relatively short, suggesting that once a property is listed, it is likely to be rented quickly. Lastly, the median household income of $100,037 provides a solid financial base for potential tenants, reducing the risk of default.
Given these figures, ZIP 75407 does not fit neatly into either a high-yield/low-stability flip-style market or a steady-cashflow zone. Instead, it represents a middle-ground scenario where landlords can expect reasonable returns without the volatility associated with high-renter populations. The slight premium in FMR over market rent allows for a modest yield, while the strong local economy and quick rental turnover contribute to a stable environment.
To illustrate, the difference between the FMR and market rent is $40 per month, which translates to a modest annual increase of $480 per unit. This is not a significant yield driver but can still provide additional revenue. Meanwhile, the low percentage of renters and high median income indicate a stable tenant pool, likely leading to fewer vacancies and less turnover, which are critical factors for maintaining consistent cash flow.
In conclusion, ZIP 75407 offers a balanced opportunity for landlords and small-portfolio investors, combining moderate yield potential with a stable rental environment. It is neither a high-risk, high-reward area nor a guaranteed low-risk, high-cashflow zone, but rather a place where careful investment can lead to predictable returns.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.