Location: Cherokee County, TX | Metro: Cherokee County, TX
| Unit Size | Monthly FMR |
|---|---|
| Studio | $860 |
| 1 Bedroom | $880 |
| 2 Bedrooms | $1,070 |
| 3 Bedrooms | $1,380 |
| 4 Bedrooms | $1,500 |
| 5 Bedrooms | $1,740 |
| 6 Bedrooms | $1,949 |
| 7 Bedrooms | $2,105 |
| 8 Bedrooms | $2,210 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 75976 reveals a stark contrast between using the Federal Market Rent (FMR) and the actual market rent. With an annualized 2BR FMR of $1,070 (for FY 2026), the gross yield calculation becomes straightforward. The total annual income based on the FMR would be $12,840 ($1,070 x 12 months). Given the median home value of $142,858, the implied gross yield when considering the FMR is approximately 9%. This is calculated as follows: ($12,840 / $142,858) * 100 = 8.99%, rounded to 9%.
In contrast, when using the Census ACS-reported market rent of $510 per month, the annual income drops significantly to $6,120 ($510 x 12 months). The gross yield based on this figure is only about 4.3%, calculated as: ($6,120 / $142,858) * 100 = 4.28%, rounded to 4.3%.
The disparity between these two yields is substantial, reflecting the difference between federally subsidized rents and the actual market conditions. In ZIP 75976, where the renter density is 32.6%, it's crucial to consider how many units might realistically be occupied by Section 8 tenants versus market-rate renters. The FMR-based yield of 9% is highly optimistic and assumes that all units are leased under Section 8 at the federally determined rate. However, the actual market rent-based yield of 4.3% is more reflective of the economic reality faced by most landlords and investors.
Given the limited data on days on market (DOM), which is listed as N/A, it's challenging to predict the speed at which units might turn over or the likelihood of maintaining occupancy rates at either level. Nevertheless, the lower gross yield of 4.3% should be considered the baseline for prudent financial planning, while the 9% yield represents a best-case scenario for those willing to navigate the complexities of Section 8 tenancy.
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.