Location: Montague County, TX | Metro: Cooke County, TX
| Unit Size | Monthly FMR |
|---|---|
| Studio | $860 |
| 1 Bedroom | $870 |
| 2 Bedrooms | $1,140 |
| 3 Bedrooms | $1,410 |
| 4 Bedrooms | $1,550 |
| 5 Bedrooms | $1,798 |
| 6 Bedrooms | $2,014 |
| 7 Bedrooms | $2,175 |
| 8 Bedrooms | $2,284 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 76265 reveals a stark contrast between the federally mandated Fair Market Rent (FMR) and the local market rent levels. For a two-bedroom property, the FMR set at $1,060 per month for fiscal year 2026 provides an annualized rental income of $12,720. When this figure is compared to the median home value of $258,747, it yields an implied gross rental yield of approximately 4.9%. This calculation is based on the assumption that the property would be rented out at the FMR rate.
In contrast, the Census ACS data indicates a market rent of $644 per month for the same type of property. This translates into an annualized rental income of $7,728, resulting in an implied gross rental yield of about 3.0%. The lower market rent suggests that landlords might struggle to achieve the higher FMR rates in the area, unless they can specifically target Section 8 tenants who are willing to pay the higher rate.
The gross-yield comparison clearly shows that renting to Section 8 tenants could potentially double your rental income compared to the current market rate. However, the reality of achieving this higher yield must be considered alongside the actual tenant demand and the ease of finding such tenants. With a renter density of only 23.3%, it is evident that a significant portion of the housing market in ZIP 76265 is occupied by homeowners, which could limit the pool of potential Section 8 tenants.
The fact that the Days on Market (DOM) is listed as N/A also raises questions about the availability of rental properties and the speed at which they are leased. This lack of data makes it difficult to assess how quickly a landlord could turn over a property to a Section 8 tenant, adding another layer of uncertainty to the projected yields.
Given these factors, while the FMR scenario presents a more attractive gross yield, the market rent scenario appears more realistic due to the low renter density and the unavailability of DOM data. Landlords and small-portfolio investors should carefully consider the local market conditions and the likelihood of securing Section 8 tenants before making investment decisions based solely on the higher FMR rates.
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.