Location: Red River County, TX | Metro: Lamar County, TX
| Unit Size | Monthly FMR |
|---|---|
| Studio | $770 |
| 1 Bedroom | $810 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,340 |
| 4 Bedrooms | $1,470 |
| 5 Bedrooms | $1,705 |
| 6 Bedrooms | $1,910 |
| 7 Bedrooms | $2,063 |
| 8 Bedrooms | $2,166 |
U.S. Census Bureau data (2024)
The analysis for ZIP code 75417 reveals a detailed look at the potential for Section 8 properties in this area. To start, the Fair Market Rent (FMR) for a two-bedroom apartment in ZIP 75417 is set at $970 per month for fiscal year 2026, based on metropolitan standards. When annualized, this translates into an effective annual rental income of $11,640. In contrast, the market rent for a similar unit, according to the Census ACS data, stands at $1,351 monthly, which annualizes to $16,212.
To calculate the gross yield, we divide the annual rental income by the median home value. For the Section 8 scenario, the gross yield is calculated as follows:
$11,640 / $197,712 = 0.0589 or 5.89%
For the market rent scenario, the calculation is:
$16,212 / $197,712 = 0.0821 or 8.21%
The gross yield comparison clearly shows that the market rent scenario provides a higher return on investment compared to the Section 8 scenario. However, it's important to consider the local rental market dynamics. With a renter density of 23.4%, the demand for rental units is relatively low, suggesting that landlords might find it challenging to fill vacancies solely with market renters. This could impact the stability of cash flows over time.
The fact that the Days on Market (DOM) data is marked as N/A indicates a lack of information on how quickly rental units are typically filled in this area. Without this data, it's difficult to assess the vacancy risk associated with market rents versus Section 8 contracts. Given the lower renter density, the predictability of Section 8 payments might be more attractive to landlords and small-portfolio investors, despite the lower gross yield.
In summary, while the market rent offers a significantly higher gross yield of 8.21% compared to the Section 8 rate of 5.89%, the lower risk and guaranteed payment structure of Section 8 can provide a more stable investment option in ZIP 75417. Investors should weigh these factors carefully when deciding on their portfolio strategy.
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.