Location: Wheeler County, TX | Metro: Hemphill County, TX
| Unit Size | Monthly FMR |
|---|---|
| Studio | $790 |
| 1 Bedroom | $820 |
| 2 Bedrooms | $1,030 |
| 3 Bedrooms | $1,340 |
| 4 Bedrooms | $1,490 |
| 5 Bedrooms | $1,728 |
| 6 Bedrooms | $1,935 |
| 7 Bedrooms | $2,090 |
| 8 Bedrooms | $2,195 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 79011 provides a detailed look into the potential rental income streams for landlords and small-portfolio investors. Based on the Fair Market Rent (FMR) for a 2-bedroom apartment set at $990 annually (for FY 2026), and the market rent at $1,078 annually according to the Census ACS, we can derive some key insights.
To start, let's consider the annualized FMR of $990. Given that the median home value is not available for ZIP 79011, we cannot calculate a precise cap rate. However, we can infer the gross yield based on the typical range of home values in similar areas. Assuming an average home value of around $150,000 for this area, the gross yield would be approximately 6.6%. This is calculated by taking the annual rent ($990) and dividing it by the property value ($150,000).
Next, looking at the market rent of $1,078 annually, the gross yield would be slightly higher at about 7.2%. Again, using the assumed average home value of $150,000, this calculation gives us a better sense of what landlords might expect if they choose to operate outside of the Section 8 program.
The implied gross-yield difference between the two scenarios is 0.6%, favoring the market rent option. However, the more realistic scenario for ZIP 79011 depends on several factors including the local rental market dynamics and the percentage of renters in the area. With a renter density of 26.9%, it suggests that a significant portion of residents are already looking for affordable housing options. Therefore, the Section 8 program could be a viable option for landlords who wish to cater to this demographic.
Additionally, the lack of data regarding the days on market (DOM) indicates that there may be limited turnover in the rental market, which could affect the overall demand for Section 8 properties. Despite this uncertainty, the slightly lower gross yield from Section 8 rents can still be attractive due to the guaranteed income and lower risk of vacancy compared to market rates.
In conclusion, while the market rent offers a higher gross yield, the stability and guaranteed income from Section 8 rents, combined with the high renter density, make the Section 8 option a practical choice for many landlords in ZIP 79011. The decision should be made based on individual financial goals and risk tolerance.
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.