Location: Mills County, TX | Metro: Brown County, TX
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $830 |
| 1 Bedroom | $860 |
| 2 Bedrooms | $1,120 |
| 3 Bedrooms | $1,450 |
| 4 Bedrooms | $1,630 |
| 5 Bedrooms | $1,891 |
| 6 Bedrooms | $2,118 |
| 7 Bedrooms | $2,287 |
| 8 Bedrooms | $2,401 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,120 | $135,435 | 0.83% | C |
| 3BR | $1,450 | $222,177 | 0.65% | D |
| 4BR | $1,630 | $337,824 | 0.48% | F |
| 5BR | $1,891 | $427,374 | 0.44% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 76801, located in Brownwood, TX, provides valuable insights into potential investment returns. To start, we annualize the Fair Market Rent (FMR) for a 2-bedroom unit, which is set at $1,070 per month for fiscal year 2026, resulting in an annual income of $12,840. When compared to the median home value of $168,881, this yields a gross rental yield of approximately 7.61%. This calculation is based on the assumption that the property can be rented out at the FMR rate.
In contrast, using the market rent figure of $885 per month, derived from Census ACS data, the annual income drops to $10,620. Given the same median home value, this translates to a gross rental yield of about 6.30%. The difference between these two yields is significant, highlighting the impact of rent control measures on investment properties.
Given the 36.9% renter density in Brownwood, it's important to consider the likelihood of securing tenants willing to pay the higher FMR rate. Additionally, the 53-day Days on Market (DOM) suggests a moderate level of competition among renters. While this DOM figure isn't excessively high, it does indicate that landlords might face challenges in finding tenants who can afford the FMR rate.
Based on these factors, the gross rental yield of 6.30%, calculated using the market rent figure, appears more realistic for most investors. It aligns better with the actual rental market conditions, taking into account the competitive landscape and the percentage of residents who are likely to be renters. However, if a landlord can secure a tenant through the Section 8 program at the higher FMR rate, the gross rental yield would be 7.61%, providing a more substantial return on investment.
Investors should carefully weigh these yields against their own financial goals and the specifics of the local rental market. The choice between aiming for the higher FMR rate or settling for the market rent rate will depend on individual circumstances and risk tolerance.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.