Location: Ward County, TX | Metro: Ward County, TX
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,090 |
| 1 Bedroom | $1,090 |
| 2 Bedrooms | $1,430 |
| 3 Bedrooms | $1,700 |
| 4 Bedrooms | $2,060 |
| 5 Bedrooms | $2,390 |
| 6 Bedrooms | $2,677 |
| 7 Bedrooms | $2,891 |
| 8 Bedrooms | $3,036 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 79756 reveals important insights into the potential returns for landlords and small-portfolio investors. Using the Federal Market Rent (FMR) for a 2-bedroom apartment set at $1,260 annually (for FY 2026, metro), and the market rent figure of $1,133 per month based on Census ACS data, we can derive the implied gross yields.
First, let's calculate the gross yield using the FMR. With an annualized rent of $1,260, the monthly rent would be approximately $105. Given the median home value in the area is $203,291, the gross yield under the Section 8 scenario is:
Next, considering the market rent of $1,133 per month, the gross yield for a non-Section 8 property is:
Comparing these two gross yields, it's evident that the market rent scenario provides a slightly higher return. However, the reality of the situation must also take into account the 23.4% renter density and the fact that the days on market (DOM) is listed as N/A, indicating a lack of recent sales data to gauge the typical time it takes to lease a property.
The lower gross yield under the Section 8 program reflects the guaranteed rental income from the government, which is a significant advantage over market fluctuations. The higher gross yield with market rent might be more appealing at first glance, but it comes with the risk of vacancy periods and potential difficulty in finding tenants willing to pay above the Section 8 rate, especially given the moderate renter density in the area.
In conclusion, while the market rent scenario offers a marginally better gross yield, the stability and security provided by the Section 8 program often outweighs the slight difference in returns. Landlords and investors should weigh the benefits of steady income against the possibility of achieving a higher gross yield through market rentals.
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.