Location: Runnels 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 scenario for ZIP code 79567 reveals interesting insights into potential investment opportunities. The Fair Market Rent (FMR) for a two-bedroom apartment in this area, as set for FY 2024, is $910 per month. Using this figure, we can calculate an annualized rental income of $10,920. In contrast, the market rent based on Census ACS data is $702 per month, leading to an annualized rental income of $8,424.
To derive the gross yield, we divide the annual rental income by the median home value of $100,166. For the Section 8 scenario, the implied gross yield is approximately 10.9%. This is calculated as follows: $10,920 / $100,166 = 0.109. On the other hand, the market rent scenario yields an implied gross yield of about 8.4%, calculated as: $8,424 / $100,166 = 0.084.
The difference between these two gross yields highlights the financial benefits of participating in the Section 8 program over renting at market rates. However, it's important to consider the broader context of the local housing market. With a renter density of 31.6%, there is a notable portion of the population that is already renting, which could indicate a competitive market for rentals. Additionally, the lack of data on days on market (DOM) suggests that either the market is stable, or there isn't enough turnover to provide meaningful insights into rental demand dynamics.
Given these factors, while the Section 8 scenario offers a higher gross yield, the market rent scenario might be more reflective of the actual rental environment in ZIP 79567. Landlords and small-portfolio investors should weigh the guaranteed income stability of Section 8 against the potential for higher yields through market-rate rentals, considering the local rental market conditions and their own 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.