Location: Denver-Aurora-Centennial, CO | Metro: Denver-Aurora-Centennial, CO 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 | $2,470 |
| 1 Bedroom | $2,580 |
| 2 Bedrooms | $3,060 |
| 3 Bedrooms | $4,020 |
| 4 Bedrooms | $4,490 |
| 5 Bedrooms | $5,208 |
| 6 Bedrooms | $5,833 |
| 7 Bedrooms | $6,300 |
| 8 Bedrooms | $6,615 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,580 | $420,018 | 0.61% | D |
| 2BR | $3,060 | $692,292 | 0.44% | F |
| 3BR | $4,020 | $1,113,055 | 0.36% | F |
U.S. Census Bureau data (2024)
The potential risks for investing in Section 8 housing in ZIP code 80202 in Denver, CO, must be carefully considered. Tenant turnover is a significant concern, with the market rent at $1,892 being far below the Federal Market Rent (FMR) of $3,110 for FY 2024. This disparity can lead to frequent changes in occupancy, increasing administrative burdens and operational costs.
Vacancy exposure is another critical issue, given that the days on market (DOM) average 76 days. This extended period can result in lost rental income and higher vacancy rates, particularly if there is a delay in securing new tenants. Additionally, the deferred maintenance exposure is substantial, considering the typical home value in the area is $558,308 while the median income is only $114,151. This income gap suggests that many residents may struggle to afford routine maintenance and repairs, potentially leading to more wear and tear on properties.
Despite these challenges, the high renter share of 77.3% in ZIP 80202 indicates a robust demand for rental properties. This high concentration of renters typically translates into a strong demand for housing vouchers, which can provide a steady stream of qualified tenants. The presence of numerous voucher holders can mitigate some of the risks associated with tenant turnover and vacancy exposure, ensuring a consistent source of rental income.
In conclusion, the investment risk for a first-time Section 8 landlord in ZIP 80202 is moderate. While there are significant risks related to tenant turnover, vacancy exposure, and deferred maintenance, the high renter share provides a counterbalance by ensuring a steady pool of potential tenants.
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.