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 | $1,390 |
| 1 Bedroom | $1,510 |
| 2 Bedrooms | $1,820 |
| 3 Bedrooms | $2,350 |
| 4 Bedrooms | $2,730 |
| 5 Bedrooms | $3,167 |
| 6 Bedrooms | $3,547 |
| 7 Bedrooms | $3,831 |
| 8 Bedrooms | $4,023 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,350 | $685,101 | 0.34% | F |
| 4BR | $2,730 | $968,343 | 0.28% | F |
| 5BR | $3,167 | $1,331,471 | 0.24% | F |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate picture for ZIP code 78257 reveals a stark contrast between government-subsidized rental income and market rents. For a two-bedroom property, the Fair Market Rent (FMR) set by the government for Section 8 purposes is $1830 per month in fiscal year 2024. This translates into an annual rental income of $21,960. In comparison, the Zillow Observed Rental Index (ZORI) for the same type of property stands at $1,387 per month, resulting in an annual rental income of $16,644.
To derive the gross yield, we must consider the median home value in ZIP 78257, which is $916,529. The gross yield for a property rented under Section 8 would be approximately 2.4%, calculated as follows: $21,960 / $916,529 * 100 = 2.4%. Conversely, if the property were rented at market rates, the gross yield would drop to about 1.8%, computed as: $16,644 / $916,529 * 100 = 1.8%.
The gross yield difference highlights the financial benefits of participating in the Section 8 program over market-rate rentals. However, the decision to pursue either option should also take into account the local rental market dynamics. With a renter density of 63.6%, it's evident that a significant portion of the population in ZIP 78257 is looking for rental housing. This high demand suggests that landlords can expect steady occupancy regardless of whether they choose to participate in Section 8 or offer market-rate rentals.
The Days on Market (DOM) statistic is listed as N/A, indicating that there isn't enough recent transaction data to provide an accurate figure. Despite this lack of specificity, the high renter density implies that properties in ZIP 78257 are likely to be rented quickly, which is beneficial for landlords. Given these conditions, the higher gross yield associated with Section 8 rentals makes them a more attractive option for landlords and small-portfolio investors seeking stable, predictable cash flows. However, the choice ultimately depends on the investor's risk tolerance and long-term goals.
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.