Location: Austin-Round Rock-San Marcos, TX | Metro: Austin-Round Rock-San Marcos, 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 | $1,940 |
| 1 Bedroom | $2,050 |
| 2 Bedrooms | $2,440 |
| 3 Bedrooms | $3,080 |
| 4 Bedrooms | $3,610 |
| 5 Bedrooms | $4,188 |
| 6 Bedrooms | $4,691 |
| 7 Bedrooms | $5,066 |
| 8 Bedrooms | $5,319 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,050 | $347,040 | 0.59% | F |
| 2BR | $2,440 | $499,411 | 0.49% | F |
| 3BR | $3,080 | $669,411 | 0.46% | F |
| 4BR | $3,610 | $888,136 | 0.41% | F |
U.S. Census Bureau data (2024)
The analysis of ZIP code 78702 in Austin, TX, reveals key insights for landlords and small-portfolio investors. Firstly, the rent math does not work favorably for landlords. The Fair Market Rent (FMR) for the zip code in fiscal year 2024 is set at $2100, whereas the actual market rent, as measured by ZORI, is $1973. This indicates that landlords may struggle to cover costs and earn profits if they rely solely on the FMR guidelines.
Secondly, the acquisition of properties in this area is moderately affordable. The median home value stands at $562,592, which is a significant investment but not prohibitive for many investors. However, the lack of data on days on market (DOM) and the fact that only 0.2% of homes are listed with a price cut suggests that competition for property purchases might be high, making it challenging to find deals below market value.
Lastly, there is a strong tenant demand in ZIP 78702. With a population of 25,985, and 59.1% of residents being renters, there is a substantial pool of potential tenants. This high renter share ensures a steady demand for rental properties, which can help maintain occupancy rates and provide a stable income stream for landlords.
In summary, while the rent math presents a challenge due to the discrepancy between FMR and market rent, the acquisition of properties remains feasible given the median home value. The robust tenant demand, driven by a high percentage of renters, makes ZIP 78702 a viable investment opportunity for those willing to adjust their expectations based on current market conditions. Landlords should focus on optimizing their rental offerings to attract the abundant tenant base and manage costs effectively to achieve profitability.
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.