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 | $107,983 | 0.94% | C |
| 3BR | $1,310 | $186,420 | 0.7% | D |
| 4BR | $1,440 | $250,965 | 0.57% | F |
| 5BR | $1,670 | $293,827 | 0.57% | F |
U.S. Census Bureau data (2024)
The market analysis for Section 8 investors in ZIP code 78589, located in San Juan, TX within the McAllen-Edinburg-Mission, TX MSA, reveals several key points. The HUD Fair Market Rent (FMR) for the area is set at $970 for the fiscal year 2024. This figure is compared against the market rent reported by the Census ACS, which stands at $937. Given these numbers, voucher tenants would generally cashflow positively at the FMR rate, indicating that landlords can expect a slight surplus when renting to Section 8 tenants.
To further analyze the investment potential, the median home value in ZIP 78589 is $183,919. Using this, we can derive the rent-to-price ratio. With an average monthly rent of $937, the annual rent would be approximately $11,244. Dividing this by the median home value gives us a rent-to-price ratio of about 6.1%, suggesting that rental income is modest relative to property values. However, this ratio can still provide a reasonable return on investment for those seeking steady cash flow.
The data shows that the median Days on Market (DOM) is not available (N/A), and there is a 0.2% share of homes that have experienced price cuts. While these metrics do not directly impact the rent-vs-buy dynamics, they suggest a stable housing market with little to no downward pressure on property values. This stability is crucial for both cashflow and long-term appreciation strategies.
The strongest investor angle in ZIP 78589 is cashflow. Despite the modest rent-to-price ratio, the positive cashflow from Section 8 tenants at the FMR rate ensures a reliable source of income. Additionally, the stable housing market provides a solid foundation for maintaining property values over time, which supports both cashflow and appreciation goals. Landlords and small-portfolio investors should focus on acquiring properties that can command the FMR or slightly above to maximize their financial benefits.
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.