Location: Mineral County, CO | Metro: Hinsdale County, CO
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 | $1,090 |
| 1 Bedroom | $1,130 |
| 2 Bedrooms | $1,470 |
| 3 Bedrooms | $1,890 |
| 4 Bedrooms | $2,280 |
| 5 Bedrooms | $2,645 |
| 6 Bedrooms | $2,962 |
| 7 Bedrooms | $3,199 |
| 8 Bedrooms | $3,359 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,130 | $287,542 | 0.39% | F |
| 2BR | $1,470 | $382,451 | 0.38% | F |
| 3BR | $1,890 | $515,750 | 0.37% | F |
| 4BR | $2,280 | $666,515 | 0.34% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 81130, Creede, CO, reveals a stark contrast between the federally determined Fair Market Rent (FMR) and the actual market rents observed. For a two-bedroom property, the FMR for fiscal year 2026 is set at $1,320 per month, while the Census ACS indicates an average market rent of $928 per month.
To calculate the implied gross yield, we annualize these figures against the median home value of $428,887. Using the FMR of $1,320, the annual rental income would be $15,840. This translates into an implied gross yield of approximately 3.7% when divided by the median home value. Conversely, applying the market rent of $928 yields an annual rental income of $11,136, resulting in a gross yield of about 2.6%.
The difference between these two gross yields is significant, reflecting the disparity between government-set rent levels and the local real estate market. Given that only 32.6% of households in Creede are renters, the market rent scenario appears more realistic. The lack of data on days on market (DOM) suggests that there might be challenges in finding tenants quickly, which could impact the overall profitability and cap rate.
In conclusion, while the Section 8 program offers a guaranteed rent of $1,320 per month, the actual market conditions suggest a lower rent of $928. This means that investors should expect a gross yield closer to 2.6%, rather than the higher 3.7% implied by the FMR. The lower renter density and uncertain tenant acquisition timeline further support the market rent figure as the more practical basis for investment decisions.
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.