Location: McAllen-Edinburg-Mission, TX | Metro: McAllen-Edinburg-Mission, TX MSA
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 | $800 |
| 1 Bedroom | $800 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,310 |
| 4 Bedrooms | $1,440 |
| 5 Bedrooms | $1,670 |
| 6 Bedrooms | $1,870 |
| 7 Bedrooms | $2,020 |
| 8 Bedrooms | $2,121 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,010 | $115,650 | 0.87% | C |
| 3BR | $1,310 | $184,753 | 0.71% | D |
| 4BR | $1,440 | $247,609 | 0.58% | F |
U.S. Census Bureau data (2024)
The rent math in ZIP code 78557, located in Hidalgo, TX, within the McAllen-Edinburg-Mission, TX MSA, does not favor landlords. The Fair Market Rent (FMR) for the zip code for fiscal year 2024 is set at $910, while the market rent, according to Census ACS data, is only $842. This discrepancy means that landlords relying on the FMR might overestimate their potential rental income, leading to a financial shortfall.
Acquisition of properties in this area is relatively affordable. With a median home value of $191,152, purchasing homes can be done within a reasonable budget. However, the lack of data on days on market (DOM) and the low percentage of homes needing price cuts (0.2%) suggest that the market may not be particularly liquid or offer many distressed sales opportunities. Landlords and small-portfolio investors should expect to pay close to the median value when acquiring properties.
Tenant demand is present but limited. The population of ZIP 78557 is 14,498, with 19.8% of residents being renters. While this indicates a base of potential tenants, the relatively low renter share suggests that the majority of residents own their homes, which could limit the pool of available renters.
Verdict: The rent math in ZIP 78557 does not align well with the actual market conditions, presenting a challenge for landlords. Acquisition costs are manageable, but the market lacks liquidity and distressed sales opportunities. Tenant demand exists, though it is modest given the low renter share. Investors should proceed with caution, ensuring they understand the local market dynamics and have a solid strategy for managing rental income expectations.
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.