Location: Boulder, CO | Metro: Boulder, 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 | $1,790 |
| 1 Bedroom | $2,040 |
| 2 Bedrooms | $2,390 |
| 3 Bedrooms | $3,180 |
| 4 Bedrooms | $3,700 |
| 5 Bedrooms | $4,292 |
| 6 Bedrooms | $4,807 |
| 7 Bedrooms | $5,192 |
| 8 Bedrooms | $5,452 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,390 | $577,025 | 0.41% | F |
| 3BR | $3,180 | $922,434 | 0.34% | F |
| 4BR | $3,700 | $1,234,461 | 0.3% | F |
| 5BR | $4,292 | $1,244,829 | 0.34% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 80305 in Boulder, Colorado, provides a clear picture of the financial viability of participating in the program. To start, the Fair Market Rent (FMR) for a two-bedroom unit in ZIP 80305 for fiscal year 2024 is set at $2,690 annually. This translates into an implied gross yield of approximately 27.1% when compared to the median home value of $991,845.
In contrast, the market rent for a similar two-bedroom unit, as indicated by the Zillow Observed Rent Index (ZORI), stands at $3,461 per month. Annualizing this figure gives us a total of $41,532, leading to an implied gross yield of around 41.9% based on the same median home value.
Given the 39.8% renter density in the area, it's evident that there is a significant demand for rental properties. However, the N/A-day Days on Market (DOM) suggests that either listings are typically rented quickly, or there isn't sufficient data to provide an accurate DOM figure. This lack of specificity makes it challenging to predict how long a property might remain vacant before finding a tenant, which is crucial for calculating potential vacancy rates.
The FMR-based scenario presents a lower gross yield but ensures a stable income stream due to the government guaranteeing payment. The market rent scenario offers a higher gross yield, reflecting the premium that tenants might be willing to pay in a competitive rental market. However, the FMR scenario is more realistic for Section 8 properties, as it directly aligns with the guaranteed income levels.
To summarize, while the market rent scenario implies a significantly higher gross yield, the FMR scenario offers a more reliable and predictable income source for landlords considering participation in the Section 8 program in ZIP 80305. The choice between these options should be made based on individual risk tolerance and investment goals.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.