Location: Fort Collins-Loveland, CO | Metro: Fort Collins-Loveland, 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 | $1,550 |
| 1 Bedroom | $1,590 |
| 2 Bedrooms | $1,760 |
| 3 Bedrooms | $2,380 |
| 4 Bedrooms | $2,580 |
| 5 Bedrooms | $2,993 |
| 6 Bedrooms | $3,352 |
| 7 Bedrooms | $3,620 |
| 8 Bedrooms | $3,801 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,590 | $369,134 | 0.43% | F |
| 2BR | $1,760 | $496,375 | 0.35% | F |
| 3BR | $2,380 | $680,831 | 0.35% | F |
| 4BR | $2,580 | $818,372 | 0.32% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP 80512 (Livermore, CO) reveals a challenging investment scenario for landlords and small-portfolio investors. Using the Fair Market Rent (FMR) for a 2BR unit at $1650 per month as of FY 2024, the annualized rental income would be $19,800. Against the median home value of $564,666, this implies a gross yield of approximately 3.5%. The calculation is straightforward: $19,800 divided by $564,666 equals 3.5%.
In contrast, using the Census ACS-reported market rent of $1,538 per month, the annualized rental income drops to $18,456. This results in a lower gross yield of about 3.3%. The calculation here is $18,456 divided by $564,666, yielding 3.3%.
The gross yield difference between the two scenarios is minimal, with Section 8 providing a slightly higher return at 3.5% compared to the market rent's 3.3%. However, the decision on which scenario is more realistic hinges on the local rental market dynamics. Given the 14.2% renter density, it is evident that a significant portion of the population prefers homeownership over renting. This suggests that landlords might face challenges in attracting tenants willing to pay market rates.
Moreover, the absence of data on days on market (DOM) indicates either a very stable rental market where vacancies are rare, or a lack of recent turnover, making it difficult to assess the current demand for rentals. In such a context, the reliability of market rent figures could be questioned.
Given these considerations, the Section 8 scenario with an annualized rental income of $19,800 and a gross yield of 3.5% appears more secure and predictable for landlords and investors. While the difference in gross yield is small, the guaranteed nature of Section 8 payments can offer a level of financial stability that market rents cannot always provide, especially in a low-renter-density area like ZIP 80512.
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.