Location: Abilene, TX | Metro: Abilene, TX MSA
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $980 |
| 1 Bedroom | $1,030 |
| 2 Bedrooms | $1,290 |
| 3 Bedrooms | $1,680 |
| 4 Bedrooms | $1,980 |
| 5 Bedrooms | $2,297 |
| 6 Bedrooms | $2,573 |
| 7 Bedrooms | $2,779 |
| 8 Bedrooms | $2,918 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,290 | $139,611 | 0.92% | C |
| 3BR | $1,680 | $201,156 | 0.84% | C |
| 4BR | $1,980 | $285,387 | 0.69% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 79605 in Abilene, TX, provides a clear snapshot of potential investment returns. The Fair Market Rent (FMR) for a two-bedroom apartment in fiscal year 2024 is set at $1,180 annually, while the Zillow Observed Rent Index (ZORI) indicates a market rent of $1,504 per month. To annualize these figures, we multiply the ZORI by 12, resulting in an annual market rent of $18,048.
Using the median home value of $170,692 as a basis, the implied gross yield for the FMR scenario is calculated as follows:
Given that the renter density in ZIP 79605 stands at 39.8%, it's important to consider the balance between market rents and the availability of tenants willing to pay them. Additionally, the 7-day days-on-market (DOM) figure suggests that properties are rented quickly, indicating a strong demand for rental units. However, this does not necessarily correlate directly to higher rental rates being accepted by tenants.
In the context of Section 8 housing, where rental rates are often capped at the FMR, the 8.3% gross yield derived from the FMR scenario is likely more realistic. While the market rent scenario offers a higher gross yield of 10.6%, the actual occupancy rate and willingness of tenants to accept higher rents must be considered. Given the relatively low renter density, landlords might find it challenging to maintain full occupancy at market rates without the flexibility to adjust rent according to tenant income.
To summarize, the FMR scenario provides a conservative yet practical view of potential returns, aligning with the realities of tenant income and housing assistance programs. Landlords and small-portfolio investors should weigh the benefits of higher yields against the risk of lower occupancy rates when making decisions about accepting Section 8 tenants in ZIP 79605.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.