Location: Houston-The Woodlands-Sugar Land, TX | Metro: Houston-The Woodlands-Sugar Land, TX HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,070 |
| 1 Bedroom | $1,090 |
| 2 Bedrooms | $1,310 |
| 3 Bedrooms | $1,750 |
| 4 Bedrooms | $2,170 |
| 5 Bedrooms | $2,517 |
| 6 Bedrooms | $2,819 |
| 7 Bedrooms | $3,045 |
| 8 Bedrooms | $3,197 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 77623 provides insight into potential investment opportunities for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a two-bedroom apartment in this area for fiscal year 2024 is set at $1050 annually. This figure represents the government-subsidized rental rate for Section 8 tenants.
Against this, the market rent for a similar unit, based on Census ACS data, stands at $566 per month, equating to an annual rent of $6792. Given that the median home value for ZIP 77623 is not available, we must rely on these rental figures to derive the gross yield for both scenarios.
In the case of Section 8, assuming the property's value is aligned with typical investment criteria where the rent covers approximately 1% of the property's value annually, the implied gross yield would be around 10.5%. This calculation is derived by dividing the annualized Section 8 rent ($1050) by the assumed property value, which would be $100,000 if the rent were to cover 1% of it.
Conversely, if we consider the market rent scenario, using the same assumption about the property's value, the gross yield would be significantly higher at approximately 68%. This is calculated by taking the annual market rent ($6792) and dividing it by the assumed property value ($100,000).
The stark difference between these yields is notable. However, considering the 8.7% renter density in ZIP 77623, it becomes clear that the market rent scenario might not always be attainable due to the limited number of renters relative to the total population. Additionally, the lack of data on the days-on-market (DOM) for properties in this ZIP code suggests a potentially slow rental market, further supporting the reliability of the Section 8 rent figure as a more stable and predictable income source.
Therefore, while the market rent offers a much higher gross yield, the Section 8 rent provides a more consistent and realistic income stream for landlords and investors looking to enter ZIP 77623.
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.