Location: Cherokee County, TX | Metro: Rusk County, TX HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $890 |
| 1 Bedroom | $930 |
| 2 Bedrooms | $1,180 |
| 3 Bedrooms | $1,440 |
| 4 Bedrooms | $1,600 |
| 5 Bedrooms | $1,856 |
| 6 Bedrooms | $2,079 |
| 7 Bedrooms | $2,245 |
| 8 Bedrooms | $2,357 |
U.S. Census Bureau data (2024)
A skeptical investor considering Section 8 properties in ZIP 75784 might raise several valid concerns regarding financial feasibility, demand for rental units, and the adequacy of housing voucher support. Here's a detailed look at these objections using the available data.
Objection 1: Will FMR $1000 (zip FY 2024) cover the mortgage on a $229,038 home?
The Fair Market Rent (FMR) for ZIP 75784 is set at $1000 per month for fiscal year 2024. To determine if this will sufficiently cover the mortgage on a home priced at $229,038, we need to calculate the potential monthly mortgage payment. Assuming a standard 30-year fixed-rate mortgage with an interest rate of 4%, the principal and interest payment would be approximately $1,099 per month. This means that the FMR does not fully cover the mortgage payment, leaving a shortfall of around $99 per month. However, it's important to note that this calculation does not include property taxes, insurance, or maintenance costs, which would further reduce the profitability of the investment.
Objection 2: Is there enough renter demand at 2.0%?
The rental vacancy rate for ZIP 75784 stands at 2.0%. This indicates a robust demand for rental units, as low vacancy rates suggest that most available units are being rented out promptly. A low vacancy rate of 2.0% is favorable for landlords and small-portfolio investors, as it minimizes the risk of extended periods without rental income. While the data does not provide the exact number of renters or the total number of rental units, the vacancy rate suggests a healthy rental market where finding tenants should not be a significant issue.
Objection 3: Will vouchers keep pace with N/A market rents?
The data provided does not specify the current level of housing vouchers in ZIP 75784, nor does it offer insight into how well these vouchers align with market rents. Given the importance of this question, especially for Section 8 properties, it's crucial to understand the dynamics between voucher amounts and actual rental costs. Without specific figures, it's challenging to make a definitive statement. However, historically, the Housing Choice Voucher program adjusts its payment standards periodically to reflect changes in the local rental market. It would be prudent for investors to monitor any updates to the voucher program and compare them against the FMR to ensure long-term financial viability.
In conclusion, while the FMR of $1000 does not entirely cover the mortgage payment on a $229,038 home, the strong demand indicated by the 2.0% vacancy rate supports the investment. The lack of data on housing vouchers necessitates ongoing monitoring to assess their alignment with market rents.
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.