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 | $1,100 |
| 1 Bedroom | $1,120 |
| 2 Bedrooms | $1,330 |
| 3 Bedrooms | $1,790 |
| 4 Bedrooms | $2,220 |
| 5 Bedrooms | $2,575 |
| 6 Bedrooms | $2,884 |
| 7 Bedrooms | $3,115 |
| 8 Bedrooms | $3,271 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,120 | $205,221 | 0.55% | F |
| 2BR | $1,330 | $266,596 | 0.5% | F |
| 3BR | $1,790 | $343,845 | 0.52% | F |
| 4BR | $2,220 | $449,431 | 0.49% | F |
| 5BR | $2,575 | $585,879 | 0.44% | F |
U.S. Census Bureau data (2024)
The ZIP code 77550 encompasses a significant portion of Galveston, TX, characterized by a substantial residential population of 23,489 residents. Over half of these residents, specifically 60.0%, are renters, indicating a strong demand for rental properties within this area. The median household income in ZIP 77550 stands at $45,047, reflecting a middle-class community. The median home value in the area is $290,387, suggesting that homeownership is relatively affordable compared to other coastal cities.
Moving into the specifics of rental economics, the Fair Market Rent (FMR) for ZIP 77550 in fiscal year 2024 is set at $1,190. This figure represents the maximum amount that a Section 8 voucher holder can pay for rent, based on HUD guidelines. In contrast, the market rent, as measured by the Zillow Observed Rental Index (ZORI), is higher at $1,372. This indicates that landlords who accept Section 8 vouchers can expect to receive slightly below market rates, which could be a consideration for those looking to maximize their rental income.
Given the demographic and economic profile of ZIP 77550, it is suitable for both hands-off voucher operators and hands-on value-add buyers. For hands-off operators, the presence of a large number of renters and the availability of Section 8 vouchers provide a steady and reliable stream of tenants. However, for value-add buyers looking to improve property values and potentially command higher rents, the opportunity exists to renovate and upgrade units, thereby attracting tenants willing to pay closer to the market rate of $1,372. The gap between the FMR and market rent also suggests potential for moderate profit margins, especially when considering the relatively low median home value of $290,387.
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.