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 | $1,440 |
| 1 Bedroom | $1,520 |
| 2 Bedrooms | $1,810 |
| 3 Bedrooms | $2,280 |
| 4 Bedrooms | $2,680 |
| 5 Bedrooms | $3,109 |
| 6 Bedrooms | $3,482 |
| 7 Bedrooms | $3,761 |
| 8 Bedrooms | $3,949 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,810 | $393,452 | 0.46% | F |
| 3BR | $2,280 | $477,264 | 0.48% | F |
| 4BR | $2,680 | $555,944 | 0.48% | F |
U.S. Census Bureau data (2024)
Austin, TX's ZIP code 78721 is a residential area with a population of 10,997. It has a significant rental market, with 48.7% of residents being renters. The median household income in this neighborhood is $84,573, indicating a middle-class community. The median home value stands at $424,958, reflecting a mix of affordable and moderately priced housing options.
The rent economics in ZIP 78721 present an interesting opportunity. The Fair Market Rent (FMR) for the fiscal year 2024 is set at $1,900, which is higher than the market rent of $1,779 (ZORI). This suggests that properties in this area could potentially attract tenants through the Section 8 program, given the discrepancy between the FMR and the actual market rates. Landlords who participate in the Section 8 program can expect a steady stream of rental income, though they must adhere to the HUD guidelines and ensure their properties meet the required standards.
Considering the practical aspects of investment, ZIP 78721 fits both hands-off voucher operators and hands-on value-add buyers. For hands-off operators, the area's demographics and the slight premium of FMR over ZORI make it suitable for stable, long-term rental income without the need for extensive property management. On the other hand, value-add buyers can capitalize on the difference between the median home value and the market rent to improve properties and increase their rental potential, thereby maximizing returns.
In summary, ZIP 78721 offers a balanced environment for real estate investors interested in the Section 8 program. With a sizeable rental market and favorable income levels, landlords can benefit from either a passive or active investment strategy depending on their goals and resources.
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.