Location: El Paso, TX | Metro: El Paso, TX HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $800 |
| 1 Bedroom | $970 |
| 2 Bedrooms | $1,150 |
| 3 Bedrooms | $1,560 |
| 4 Bedrooms | $1,920 |
| 5 Bedrooms | $2,227 |
| 6 Bedrooms | $2,494 |
| 7 Bedrooms | $2,694 |
| 8 Bedrooms | $2,829 |
The analysis for ZIP code 79923 in Unknown, TX, focuses on deriving the Section 8 cap-rate picture using available Fair Market Rent (FMR) figures and market conditions.
The annualized Fair Market Rent for a two-bedroom apartment in ZIP 79923 is set at $1150 per month for fiscal year 2024. This translates into an annual rental income of $13,800. However, the median home value in the area is currently unavailable, making it challenging to provide a direct comparison between FMR and market rents. Despite this, we can still derive some insights based on the available FMR data.
In the context of Section 8 properties, the cap rate is often calculated using the FMR as a proxy for rental income. Given the lack of specific market rent data, we rely solely on the FMR to estimate the gross yield. The implied gross yield, assuming a property value, would be calculated by dividing the annual rental income by the median home value. Without a precise median home value, this calculation cannot be completed accurately.
Regarding the renter density and days on market (DOM), these metrics are also currently unavailable. These factors are crucial in determining the likelihood of finding tenants willing to pay market rates versus those who might qualify for Section 8 housing assistance. Renter density affects the occupancy rate, while DOM reflects the ease or difficulty of leasing units.
While we cannot provide a definitive cap rate due to missing data points, it's important to note that the Section 8 program provides a stable source of rental income. The gross yield based on FMR alone suggests a conservative approach to investment, ensuring that even if market rents are lower, there is a guaranteed income stream. Landlords should consider the stability offered by the Section 8 program against the potential variability in market rents.
For small-portfolio investors, the decision to participate in the Section 8 program should weigh the benefits of steady income against the administrative requirements and potential limitations on rent increases. The annualized FMR of $13,800 offers a clear baseline for expected income, but without knowing the exact median home value and other local market conditions, it's difficult to provide a comprehensive financial analysis.
To proceed with a more detailed analysis, investors should seek out local real estate agents or consult recent sales data to get an accurate picture of median home values and current market rents. This additional information will allow for a more precise calculation of the cap rate and gross yield, providing a clearer understanding of the investment potential in ZIP 79923.
Data Sources: FMR data from HUD (2027).
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.