Location: Kinney County, TX | Metro: Kinney County, TX
| Unit Size | Monthly FMR |
|---|---|
| Studio | $820 |
| 1 Bedroom | $860 |
| 2 Bedrooms | $1,080 |
| 3 Bedrooms | $1,400 |
| 4 Bedrooms | $1,560 |
| 5 Bedrooms | $1,810 |
| 6 Bedrooms | $2,027 |
| 7 Bedrooms | $2,189 |
| 8 Bedrooms | $2,298 |
U.S. Census Bureau data (2024)
The analysis for ZIP code 78832 reveals a distinct picture regarding potential Section 8 investments. Based on the Fair Market Rent (FMR) for a two-bedroom apartment set at $1,020 annually for Fiscal Year 2026, the implied gross yield for a property valued at $123,242 would be approximately 8.2%. This calculation is derived by taking the annual rental income ($1,020) and dividing it by the median home value ($123,242).
In contrast, using the market rent figure of $1,272 per month as reported by the Census Bureau's American Community Survey (ACS), the implied gross yield increases to about 12.4%. This higher yield is calculated by multiplying the monthly market rent ($1,272) by 12 months to get the annual income ($15,264) and then dividing by the median home value ($123,242).
The gross-yield comparison clearly shows that the market rent scenario offers a significantly better return compared to the FMR under Section 8. However, the decision on which scenario is more realistic hinges on several factors, including the local rental market dynamics and the specific conditions of Section 8 tenancy.
Given the 16.1% renter density in ZIP 78832, the market rent scenario appears more plausible. A lower renter density suggests that homeownership is prevalent, which could indicate that rental properties, particularly those receiving Section 8 subsidies, face competitive challenges. The N/A-day DOM (Days on Market) data implies either very quick sales or incomplete data, making it difficult to assess the typical time frame for property turnover in this area.
While the market rent provides a higher gross yield, landlords must consider the long-term implications of Section 8 tenancy, such as the federal subsidy caps and the potential for longer lease terms. In summary, the market rent scenario offers a more attractive initial return, but the actual investment decision should weigh the benefits of the higher yield against the constraints of Section 8 participation.
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.