Location: Panola County, TX | Metro: Harrison County, TX HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $890 |
| 1 Bedroom | $970 |
| 2 Bedrooms | $1,270 |
| 3 Bedrooms | $1,520 |
| 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 analysis for ZIP code 75642 focuses on the implications of the Section 8 program on real estate investments, specifically comparing the federal market rent (FMR) for a two-bedroom apartment against potential market rents and median home values.
The annualized FMR for a two-bedroom rental property in ZIP 75642 for fiscal year 2024 is set at $1210 per month. This translates into an annual rent of $14,520. Given that the median home value is not available, we can only infer the gross yield based on the FMR. Assuming a median home value in line with typical low-income housing values, let's consider a hypothetical median home value of $150,000 for the sake of illustration. The gross yield using the FMR would be approximately 9.68% ($14,520 / $150,000).
Market rent data is also not available for ZIP 75642. However, if we assume that the market rent could potentially be higher, say 20% above the FMR, it would be around $1452 per month, or $17,424 annually. Using the same median home value of $150,000, the gross yield under this scenario would be about 11.62% ($17,424 / $150,000).
The gross yield comparison shows a difference of nearly 2 percentage points between the FMR-based scenario and the hypothetical market rent scenario. This suggests that investing in properties for Section 8 tenants in ZIP 75642 could offer a slightly lower gross yield compared to what might be achievable in a more robust rental market.
Given the 0.0% renter density in ZIP 75642, it is clear that the demand for rental properties, particularly those participating in the Section 8 program, is minimal. This low density makes it difficult to achieve high occupancy rates, thus impacting the overall profitability of such investments. Additionally, the lack of data regarding days on market (DOM) indicates that there is insufficient activity to gauge the speed at which properties are rented out, further complicating investment decisions.
In conclusion, while the Section 8 program offers a stable source of income, the gross yields derived from the FMR are lower than what could potentially be achieved with market rents. The low renter density and limited market activity suggest that the FMR-based scenario is more realistic for this ZIP code. Investors should carefully weigh these factors before committing to any real estate purchases intended for Section 8 participation in ZIP 75642.
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.