Location: Wood County, TX | Metro: Franklin County, TX
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 | $810 |
| 1 Bedroom | $910 |
| 2 Bedrooms | $1,110 |
| 3 Bedrooms | $1,370 |
| 4 Bedrooms | $1,570 |
| 5 Bedrooms | $1,821 |
| 6 Bedrooms | $2,040 |
| 7 Bedrooms | $2,203 |
| 8 Bedrooms | $2,313 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,370 | $578,407 | 0.24% | F |
U.S. Census Bureau data (2024)
The analysis of Section 8 cap rates for ZIP code 75480 reveals a specific financial landscape that investors should consider. The Fair Market Rent (FMR) for a two-bedroom apartment in the metro area for fiscal year 2026 is set at $1,090 annually. To derive the gross yield, we divide the annual rental income by the median home value of $540,529. This calculation gives us an implied gross yield of approximately 0.20%.
In contrast, the market rent figure is currently unavailable, indicating a gap in the data that prevents a direct comparison. However, if we assume the market rent is higher than the FMR, the gross yield would naturally increase, offering a potentially more attractive investment scenario. For example, if the market rent were $1,500 per month, the gross yield would be around 3.33%, significantly higher than the Section 8 scenario.
Given the 4.8% renter density in ZIP 75480, it's important to note that the majority of homes are likely owner-occupied, which can affect the availability of properties for rental investments. Additionally, the absence of Days on Market (DOM) data suggests that there might be inefficiencies in tracking the rental market dynamics, making it challenging to assess the speed at which rental units are typically filled.
The comparison between the Section 8 gross yield and a hypothetical market rent scenario highlights the stark difference in potential returns. A gross yield of 0.20% based on Section 8 rates is considerably lower than what could be achieved through market rents, assuming the latter is higher. This makes the market rent scenario more realistic for most investors seeking higher yields.
However, investors must weigh the stability and guaranteed income stream of Section 8 against the higher but riskier yields from market rentals. The decision ultimately depends on the investor's risk tolerance and investment goals.
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.