Location: Nolan County, TX | Metro: Abilene, TX MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $910 |
| 1 Bedroom | $920 |
| 2 Bedrooms | $1,150 |
| 3 Bedrooms | $1,490 |
| 4 Bedrooms | $1,790 |
| 5 Bedrooms | $2,076 |
| 6 Bedrooms | $2,325 |
| 7 Bedrooms | $2,511 |
| 8 Bedrooms | $2,637 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate picture for ZIP code 79561 reveals some interesting insights for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a two-bedroom apartment in this ZIP code for fiscal year 2024 is set at $920 annually. Using this figure, the implied gross yield for a property rented under the Section 8 program can be calculated. Given the median home value in ZIP 79561 is $153,910, the annualized FMR of $920 translates into an implied gross yield of approximately 0.6% ($920 / $153,910).
In contrast, the market rent for a two-bedroom apartment, based on Census ACS data, is $725 annually. This market rent figure yields an implied gross yield of about 0.47% ($725 / $153,910). Thus, the Section 8 rent provides a higher gross yield compared to the market rent.
However, it's important to consider the overall rental market dynamics in ZIP 79561. With a renter density of 14.1%, the demand for rental properties is relatively low. Additionally, the lack of data on days on market (DOM) suggests that the rental market might be somewhat stagnant, making it difficult to predict how quickly a property might be leased.
Given these factors, while the Section 8 rent offers a higher gross yield at 0.6%, the lower market rent scenario at 0.47% might be more realistic considering the potential challenges in finding tenants and the possibility of longer vacancy periods. Investors should weigh the benefits of a slightly higher yield against the risk of slower tenant turnover and the administrative complexities often associated with Section 8 properties.
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.