Location: Hockley County, TX | Metro: Hockley County, TX HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $860 |
| 1 Bedroom | $870 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,410 |
| 4 Bedrooms | $1,690 |
| 5 Bedrooms | $1,960 |
| 6 Bedrooms | $2,195 |
| 7 Bedrooms | $2,371 |
| 8 Bedrooms | $2,490 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 79372 provides valuable insights into the potential returns for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a 2-bedroom apartment in this area, based on the fiscal year 2026 metro data, is set at $970 per month. Meanwhile, the market rent for a similar unit, according to the Census ACS data, stands at $675 monthly. To derive the cap-rate, we must first annualize these figures.
Annualizing the FMR of $970 gives us an annual rent of $11,640. Given the median home value of $140,830, the implied gross yield for the Section 8 scenario would be approximately 8.27%. This is calculated by dividing the annualized FMR by the median home value: $11,640 / $140,830 = 0.0827, or 8.27%. On the other hand, annualizing the market rent of $675 yields an annual rent of $8,100. Using the same median home value, the implied gross yield for the market rent scenario is about 5.75%, derived from $8,100 / $140,830 = 0.0575, or 5.75%.
The 25.8% renter density suggests a moderate demand for rental properties, but it does not provide enough context to determine the likelihood of either scenario being more prevalent. However, the FMR-based gross yield of 8.27% is significantly higher than the market rent-based gross yield of 5.75%. This indicates that participating in the Section 8 program could potentially offer a better return on investment compared to renting at market rates.
The absence of data regarding the days on market (DOM) makes it difficult to assess the speed at which properties are rented out under either scenario. Nonetheless, the disparity between the two gross yields is notable and should be considered when evaluating investment opportunities in ZIP 79372. Investors looking for higher returns might find the Section 8 program more attractive, despite the challenges it might entail.
In conclusion, while the market rent scenario offers a gross yield of 5.75%, the Section 8 scenario presents a more favorable gross yield of 8.27%. This comparison highlights the potential benefits of the Section 8 program for landlords and small-portfolio investors in ZIP 79372.
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.