Location: San Antonio-New Braunfels, TX | Metro: San Antonio-New Braunfels, 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 | $1,010 |
| 1 Bedroom | $1,100 |
| 2 Bedrooms | $1,320 |
| 3 Bedrooms | $1,710 |
| 4 Bedrooms | $1,980 |
| 5 Bedrooms | $2,297 |
| 6 Bedrooms | $2,573 |
| 7 Bedrooms | $2,779 |
| 8 Bedrooms | $2,918 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,710 | $214,378 | 0.8% | D |
| 4BR | $1,980 | $247,570 | 0.8% | D |
| 5BR | $2,297 | $312,394 | 0.74% | D |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 78238 reveals interesting insights for landlords and small-portfolio investors. Using the Fair Market Rent (FMR) for a two-bedroom apartment, which is set at $1320 annually for FY 2024, and the Zillow Observed Rent Index (ZORI) of $1,239 per month, we can derive the implied gross yield against the median home value of $223,694.
In the case of the Section 8 FMR, the annual rental income would be $1320. This translates to an implied gross yield of approximately 0.59%. The calculation is straightforward: divide the annual rental income by the median home value ($1320 / $223,694 = 0.0059 or 0.59%).
On the other hand, if we use the ZORI figure, the monthly rental income is $1,239, which annualizes to $14,868. This results in a significantly higher implied gross yield of about 6.65% ($14,868 / $223,694 = 0.0665 or 6.65%).
The gross-yield comparison between these two scenarios is stark. The Section 8 FMR scenario offers a much lower yield, making it less attractive purely from a financial standpoint. However, the reality of the rental market in ZIP 78238 must also be considered. With a renter density of 55.2%, the competition for tenants is likely high, especially among those who qualify for Section 8 housing assistance. This makes the ZORI scenario more realistic for most properties, assuming they can attract non-assisted renters willing to pay the market rate.
It's important to note that the days on market (DOM) information is not available, which could provide further insight into how quickly properties are rented out and the potential vacancy rates. Nonetheless, based on the median home value and the ZORI, the market rent scenario provides a more substantial return on investment, suggesting that landlords and investors should focus on attracting market-rate tenants where possible to maximize their yields.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.