Location: Fayette County, TX | Metro: Austin County, TX HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $860 |
| 1 Bedroom | $910 |
| 2 Bedrooms | $1,130 |
| 3 Bedrooms | $1,480 |
| 4 Bedrooms | $1,710 |
| 5 Bedrooms | $1,984 |
| 6 Bedrooms | $2,222 |
| 7 Bedrooms | $2,400 |
| 8 Bedrooms | $2,520 |
U.S. Census Bureau data (2024)
The ZIP code 78950 is located in a neighborhood that is predominantly owner-occupied, with only 14.6% of the population being renters. This means there are limited opportunities for rental properties in this area. The total population of the ZIP is 2,300, indicating it is a small, tight-knit community. The median household income stands at $91,354, which is relatively high, suggesting that residents have disposable income beyond basic needs.
Additionally, the median home value in ZIP 78950 is $609,775, reflecting the affluent nature of the area. For context, the Fair Market Rent (FMR) for the ZIP code for fiscal year 2024 is set at $920, significantly lower than the average market rent of $1,304 according to the Census Bureau's American Community Survey (ACS).
This discrepancy between the FMR and the actual market rent highlights a potential challenge for Section 8 investors. The FMR is designed to ensure affordable housing but in this case, it falls short of covering the typical rental costs in ZIP 78950. Consequently, landlords operating under a hands-off model might find the returns insufficient given the high property values and maintenance costs associated with an upscale area.
In contrast, a hands-on value-add buyer could potentially benefit from the higher market rents by renovating properties and attracting tenants willing to pay above the subsidized rate. However, such a strategy requires active management and a keen eye for maximizing property value, which may not align with the passive investment goals of many Section 8 operators.
To summarize, ZIP 78950 is not well-suited for hands-off Section 8 operators due to the low percentage of renters and the substantial gap between FMR and market rents. It is better suited for investors who can actively manage properties and seek to capitalize on the premium market conditions through value-add strategies.
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.