Location: Sherman County, TX | Metro: Dallam County, TX
| Unit Size | Monthly FMR |
|---|---|
| Studio | $820 |
| 1 Bedroom | $970 |
| 2 Bedrooms | $1,060 |
| 3 Bedrooms | $1,410 |
| 4 Bedrooms | $1,550 |
| 5 Bedrooms | $1,798 |
| 6 Bedrooms | $2,014 |
| 7 Bedrooms | $2,175 |
| 8 Bedrooms | $2,284 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 79084 provides a detailed look at potential rental income scenarios based on the Fair Market Rent (FMR) and market rent figures. The annualized FMR for a 2-bedroom apartment in this area for FY 2026 is set at $970, while the Census ACS reported market rent stands at $529.
To calculate the implied gross yield, we use these figures against the median home value of $168,757. For the FMR scenario, the annual rent would be $11,640 ($970 x 12 months), resulting in an implied gross yield of approximately 6.9%. This calculation is derived from the formula: Gross Yield = (Annual Rent / Median Home Value).
In contrast, using the Census ACS market rent figure of $529 per month, the annual rent would amount to $6,348 ($529 x 12 months). This translates into an implied gross yield of roughly 3.7%, significantly lower than the FMR scenario.
The 25.3% renter density in ZIP 79084 suggests a moderate demand for rental properties. However, the lack of Days on Market (DOM) data makes it challenging to assess how quickly units might be filled or the competition level in the rental market. Despite this, the FMR-based gross yield of 6.9% is more likely to reflect the actual income potential for Section 8 landlords due to the guaranteed nature of government subsidies. Landlords can rely on this income stream, whereas market rents can fluctuate based on supply and demand dynamics.
Investors should note that while the FMR scenario offers a higher gross yield, it also comes with the administrative requirements and restrictions associated with participating in the Section 8 program. On the other hand, the market rent scenario, though lower at 3.7%, allows for greater flexibility in setting rent and managing properties without the constraints of a government program.
Given the specifics of ZIP 79084, the FMR-based gross yield of 6.9% is more realistic for Section 8 properties, considering the stable income source provided by the government. However, investors must balance this higher yield with the potential operational complexities of the program.
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.