Location: Falls County, TX | Metro: Killeen-Temple, TX HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $890 |
| 1 Bedroom | $900 |
| 2 Bedrooms | $1,140 |
| 3 Bedrooms | $1,580 |
| 4 Bedrooms | $1,910 |
| 5 Bedrooms | $2,216 |
| 6 Bedrooms | $2,482 |
| 7 Bedrooms | $2,681 |
| 8 Bedrooms | $2,815 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 76656 reveals a significant difference between using the Federal Market Rent (FMR) and the market rent figures. The annualized FMR for a 2-bedroom apartment in this area for FY 2024 is set at $1100, while the market rent based on Census ACS data stands at $750.
To calculate the gross yield, we use the median home value of $206,575 as our base figure. With an annualized FMR of $1100, the gross yield is approximately 5.33%. This is derived by multiplying the monthly rent by 12 months and dividing it by the median home value: ($1100 * 12) / $206,575 = 5.33%. In contrast, when using the market rent of $750, the gross yield drops to about 3.92%, calculated similarly: ($750 * 12) / $206,575 = 3.92%.
Given the 20.8% renter density in ZIP 76656, it is important to consider the likelihood of finding tenants willing to pay the higher FMR rate. While the FMR scenario offers a more attractive gross yield, the actual rental market may not support such high rates consistently. The N/A-day Days on Market (DOM) indicates that there is limited recent transaction data to provide a precise timeframe for how long properties typically stay on the market before being rented, making it challenging to predict how quickly a property can be leased at the FMR rate.
In conclusion, the FMR-based gross yield of 5.33% is theoretically more favorable for landlords and small-portfolio investors. However, the market rent-based gross yield of 3.92% is likely a more realistic expectation given the current rental environment and tenant density. Investors should weigh these factors carefully when considering Section 8 participation in ZIP 76656.
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.