Location: Houston-The Woodlands-Sugar Land, TX | Metro: Houston-The Woodlands-Sugar Land, TX HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,210 |
| 1 Bedroom | $1,240 |
| 2 Bedrooms | $1,470 |
| 3 Bedrooms | $1,980 |
| 4 Bedrooms | $2,460 |
| 5 Bedrooms | $2,854 |
| 6 Bedrooms | $3,196 |
| 7 Bedrooms | $3,452 |
| 8 Bedrooms | $3,625 |
The analysis for ZIP code 77262 in Texas reveals some critical insights into the potential returns for landlords and small-portfolio investors participating in the Section 8 program. The Fair Market Rent (FMR) for a two-bedroom apartment in this area, as of FY 2024, is set at an annualized rate of $1330. This figure serves as the benchmark for rental subsidies under Section 8.
To derive the cap-rate picture, we must compare the FMR against typical market rents and median home values. Unfortunately, the specific market rent and median home value data for ZIP 77262 are not available, making it challenging to provide a precise cap-rate calculation. However, the implied gross yield can still be estimated using the FMR.
In the scenario where the market rent aligns closely with the FMR, the annualized income per unit would be $1330. Given the lack of median home value data, we cannot calculate the exact gross yield percentage. However, if we assume that the median home value is significantly higher than the FMR, the gross yield would be lower, reflecting the cost of property ownership relative to rental income.
A more realistic scenario might consider the actual renter density and days on market (DOM) for the area. Without specific figures, we can infer that areas with higher renter density typically see shorter DOM periods, indicating a stronger demand for rentals. This suggests that landlords could potentially command rents above the FMR, thereby increasing their gross yield.
However, the absence of precise market rent and median home value data limits our ability to provide a definitive cap-rate. Investors should gather local real estate market data to refine these estimates. In conclusion, while the FMR provides a baseline for rental income, the true gross yield will depend on the prevailing market conditions in ZIP 77262.
Data Sources: FMR data from HUD (2027).
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.