Location: Titus County, TX | Metro: Morris County, TX
| Unit Size | Monthly FMR |
|---|---|
| Studio | $780 |
| 1 Bedroom | $810 |
| 2 Bedrooms | $1,020 |
| 3 Bedrooms | $1,370 |
| 4 Bedrooms | $1,680 |
| 5 Bedrooms | $1,949 |
| 6 Bedrooms | $2,183 |
| 7 Bedrooms | $2,358 |
| 8 Bedrooms | $2,476 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 75571 reveals a nuanced investment landscape. To start, let's consider the Federal Market Rent (FMR) for a two-bedroom apartment, which is set at $970 per month for fiscal year 2026. This translates into an annualized rental income of $11,640. Given the median home value in the area is $188,245, the implied gross yield using the FMR would be approximately 6.2%. This is calculated by dividing the annual rental income by the median home value.
Next, let's look at the market rent data, which stands at $606 per month according to the Census ACS. This equates to an annual rental income of $7,272. Using the same median home value, the implied gross yield based on market rent would be around 3.9%. This calculation provides a direct comparison between the two scenarios, showing that the Section 8 scenario offers a significantly higher gross yield than the market rent scenario.
The 14.9% renter density in ZIP 75571 suggests that a substantial portion of the population might be interested in rental properties, including those under the Section 8 program. However, the lack of specific data on the number of days on market (DOM) for these units makes it challenging to assess the speed at which units can be rented out. Despite this, the higher gross yield offered by the Section 8 scenario makes it a more attractive option for landlords and small-portfolio investors looking to secure steady rental income.
It's important to note that while the gross yield is a critical factor, investors must also consider other aspects such as maintenance costs, vacancy rates, and the administrative burden associated with managing Section 8 properties. Nonetheless, the clear advantage in gross yield, with the Section 8 scenario offering over 50% more potential annual income compared to the market rent scenario, positions it as a more realistic and profitable investment opportunity for those willing to engage with the program.
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.