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 | $1,710 |
| 1 Bedroom | $1,790 |
| 2 Bedrooms | $2,120 |
| 3 Bedrooms | $2,780 |
| 4 Bedrooms | $3,110 |
| 5 Bedrooms | $3,608 |
| 6 Bedrooms | $4,041 |
| 7 Bedrooms | $4,364 |
| 8 Bedrooms | $4,582 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,790 | $222,220 | 0.81% | C |
| 2BR | $2,120 | $316,366 | 0.67% | D |
| 3BR | $2,780 | $537,349 | 0.52% | F |
| 4BR | $3,110 | $657,801 | 0.47% | F |
| 5BR | $3,608 | $755,873 | 0.48% | F |
U.S. Census Bureau data (2024)
The potential risks for Section 8 investments in ZIP 80227, Lakewood, CO, are significant. Firstly, tenant turnover is a critical issue due to the disparity between the market rent of $1,730 and the Fair Market Rent (FMR) of $2,110 for FY 2024. Landlords may face challenges in retaining tenants who are accustomed to paying lower rents, leading to frequent changes in occupancy. Secondly, vacancy exposure is another concern, especially considering that homes in the area typically take 28 days to sell, indicating a relatively quick market but also suggesting that vacancies can occur and persist, impacting cash flow negatively. Additionally, deferred maintenance poses a risk given the typical home value of $537,720 and a median income of $90,316. Homeowners may struggle to keep up with maintenance costs, which could affect the overall condition and appeal of rental properties.
However, these risks are somewhat mitigated by the high renter share of 33.2%. This statistic suggests a robust demand for rental housing, which often translates into higher demand for Section 8 vouchers. The concentration of renters in the area implies that there will be a steady pool of tenants eligible for the program, ensuring a consistent stream of applicants for your properties.
Verdict: Moderate risk for a first-time Section 8 landlord.
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.