Location: Houston-The Woodlands-Sugar Land, TX | Metro: Houston-The Woodlands-Sugar Land, TX HUD Metro FMR Area
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 | $1,050 |
| 1 Bedroom | $1,070 |
| 2 Bedrooms | $1,270 |
| 3 Bedrooms | $1,710 |
| 4 Bedrooms | $2,120 |
| 5 Bedrooms | $2,459 |
| 6 Bedrooms | $2,754 |
| 7 Bedrooms | $2,974 |
| 8 Bedrooms | $3,123 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,070 | $84,536 | 1.27% | A |
| 2BR | $1,270 | $125,245 | 1.01% | B |
| 3BR | $1,710 | $185,518 | 0.92% | C |
| 4BR | $2,120 | $247,863 | 0.86% | C |
| 5BR | $2,459 | $313,580 | 0.78% | D |
U.S. Census Bureau data (2024)
ZIP 77520, located in Baytown, TX, within the Houston-The Woodlands-Sugar Land, TX HUD Metro FMR Area, serves as an ideal cash-flow anchor for a Section 8 portfolio strategy. The Fair Market Rent (FMR) for FY 2024 is set at $1140, which is below the market rent of $1,221. This $81 spread indicates that properties in this area can be leased at rates slightly above the FMR without straining tenant budgets, thus ensuring steady cash flow.
The median home value in ZIP 77520 stands at $172,932, which is relatively low compared to other areas in the metro region. This makes it easier for landlords to acquire properties at a reasonable cost, thereby increasing their chances of achieving positive cash flow. Furthermore, the low price-cut share of 0.2% suggests that rental prices are stable and less likely to require frequent adjustments, adding to the predictability of cash flows.
The Days on Market (DOM) figure of 54 days indicates a moderate vacancy rate, which is beneficial for maintaining consistent income streams. While a lower DOM would be preferable for immediate occupancy, 54 days still represents a reasonable period for finding tenants, especially considering the robust demand for rental properties in the area.
The renter share of 47.8% and median income of $54,278 further support the role of ZIP 77520 as a cash-flow anchor. These figures suggest a significant portion of the population relies on rentals, and the median income is sufficient to cover the FMR without excessive financial strain. As such, landlords can expect a steady pool of potential tenants who qualify for Section 8 assistance, reducing the risk of vacancies and ensuring reliable cash flow.
In summary, ZIP 77520 is best suited as a cash-flow anchor within a Section 8 portfolio due to its favorable FMR-market rent spread, stable property values, moderate vacancy rates, and a substantial renter base with adequate income levels.
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.