Location: McCulloch County, TX | Metro: Concho County, TX
| Unit Size | Monthly FMR |
|---|---|
| Studio | $810 |
| 1 Bedroom | $830 |
| 2 Bedrooms | $1,070 |
| 3 Bedrooms | $1,350 |
| 4 Bedrooms | $1,540 |
| 5 Bedrooms | $1,786 |
| 6 Bedrooms | $2,000 |
| 7 Bedrooms | $2,160 |
| 8 Bedrooms | $2,268 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 76852 provides insight into potential investment opportunities for landlords and small-portfolio investors. To begin, let's consider the Fair Market Rent (FMR) for a 2-bedroom apartment, which is set at $1,050 annually for fiscal year 2026, based on metro rates.
In the first scenario, we use the Section 8 FMR to estimate the gross yield. Given that the median home value is not available, we must rely on the rental income figures provided. The annualized rent for a 2BR unit under Section 8 is $1,050. However, without knowing the market rent or the median home value, it's impossible to calculate an exact cap rate. Nonetheless, we can infer that the gross yield would be lower compared to typical market yields due to the fixed nature of Section 8 rents.
The second scenario involves comparing the Section 8 rent to the market rent. Unfortunately, the market rent for ZIP 76852 is also not available, making it difficult to provide a direct comparison. Nevertheless, if we assume that the market rent exceeds the Section 8 FMR, the gross yield would be higher for market-rate rentals. This is because the market rent would likely generate more income relative to the property's value than the fixed Section 8 rent.
Given the 15.5% renter density in ZIP 76852, it's clear that the majority of homeowners are likely owner-occupiers rather than landlords. This suggests that the demand for rental properties, including those eligible for Section 8, might be relatively low. Additionally, the lack of data on the average Days on Market (DOM) indicates uncertainty about how quickly rental units are occupied, which could affect cash flow and vacancy rates.
In conclusion, while the exact cap rate cannot be calculated without the median home value and market rent, it is evident that the gross yield from a Section 8 property would be lower than that from a market-rate rental. This is due to the fixed nature of Section 8 rents compared to potentially higher market rents. Investors should consider these factors when evaluating the suitability of ZIP 76852 for Section 8 investments.
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.