Section 8 Fair Market Rent (FMR) for ZIP 79114 - 2027

FY 2027 Fair Market Rent Rates

The analysis for ZIP code 79114 in Unknown, TX, reveals some limitations due to incomplete data, but we can still draw valuable insights regarding the potential for Section 8 properties.

The Fair Market Rent (FMR) for a two-bedroom apartment in ZIP 79114 for FY 2024 is set at $1170 per month. This annualizes to $14,040 per year. However, without the median home value, it's challenging to provide an exact cap rate. The cap rate is calculated as the net operating income divided by the property value. For a rough estimation, let's assume a hypothetical median home value to illustrate the gross yield calculation.

If we hypothetically consider a median home value of $200,000 for ZIP 79114, the gross yield would be calculated as follows:

$14,040 annualized rent / $200,000 median home value = 7.02% gross yield.

Note that this is purely illustrative since the actual median home value is not available. In reality, the gross yield would depend on the actual property value.

The lack of market rent data means we cannot directly compare the Section 8 rent to the market rent for ZIP 79114. However, in many areas, Section 8 rents are lower than market rents, which could imply a lower gross yield if market rents were considered.

Given the unknown renter density and days on market (DOM), it's difficult to assess the likelihood of finding tenants for a Section 8 property. Typically, higher renter density and shorter DOM periods indicate a more favorable market for rentals, including those under the Section 8 program.

To summarize, based on the provided FMR, the gross yield for a Section 8 property in ZIP 79114 would be 7.02% using our hypothetical median home value. This figure must be adjusted according to the actual median home value in the area. Without market rent data, a direct comparison cannot be made, but it's generally understood that Section 8 rents are below market rates, thus likely providing a lower gross yield. Landlords and investors should proceed with caution, considering the limited data available for making informed decisions about Section 8 investments in ZIP 79114.

Data Sources: FMR data from HUD (2027).

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.