Location: Burnet County, TX | Metro: Austin-Round Rock-San Marcos, TX MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,330 |
| 1 Bedroom | $1,410 |
| 2 Bedrooms | $1,680 |
| 3 Bedrooms | $2,120 |
| 4 Bedrooms | $2,490 |
| 5 Bedrooms | $2,888 |
| 6 Bedrooms | $3,235 |
| 7 Bedrooms | $3,494 |
| 8 Bedrooms | $3,669 |
U.S. Census Bureau data (2024)
A landlord considering investing in ZIP code 78642 for Section 8 purposes should follow a structured decision-making process based on the following criteria:
1. Does the Fair Market Rent (FMR) of $1470 cover the debt service on a property valued at $491,565?
If yes, proceed to the next question. The FMR of $1470 must be sufficient to ensure that rental income can meet the mortgage payments and other expenses associated with owning a property valued at $491,565. This is a critical first step because if the FMR does not cover the debt service, then the investment would not be financially viable under Section 8.
If no, do not invest. A property valued at $491,565 will likely require a higher rental income to cover the debt service, which the FMR of $1470 cannot provide.
2. How does the market rent ($2,181 ZORI) compare to the FMR?
If the market rent is above the FMR, it suggests that there is room for profit beyond the Section 8 program. However, landlords should still consider the FMR when accepting Section 8 tenants.
If the market rent is equal to the FMR, then the landlord can expect to receive exactly the FMR amount as rent, which is sufficient but offers no additional margin.
If the market rent is below the FMR, this would be an unusual scenario given the provided data. In such a case, landlords might find themselves unable to attract non-Section 8 tenants willing to pay the FMR, which could limit their overall rental income potential.
3. Is the demand sufficient with 17.1% of residents being renters and an average days on market (DOM) of 70 days?
If yes, then the demand appears to be adequate. With 17.1% of residents renting and a DOM of 70 days, properties in ZIP 78642 are generally occupied relatively quickly, indicating a steady demand for rentals.
If no, evaluate further. A DOM of 70 days is considered reasonable, but the percentage of renters at 17.1% is relatively low. Landlords should assess whether this percentage is stable or trending upwards before making an investment decision.
It depends. For some investors, the lower percentage of renters might still be acceptable if they are confident in the stability and growth of the local rental market. However, others might prefer areas with a higher percentage of renters to ensure a larger pool of potential tenants.
In conclusion, for ZIP 78642, the FMR of $1470 should be analyzed against the debt service costs of a $491,565 property. If it covers these costs, and the market rent of $2,181 exceeds the FMR, then the investment is financially sound. Demand considerations show that while the percentage of renters is modest, the DOM indicates a timely occupancy rate, suggesting that demand is sufficient for most investors. However, individual risk tolerance and investment goals will ultimately determine the viability of this ZIP code for Section 8 investments.
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.