Location: La Plata County, CO | Metro: Farmington, NM 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 | $1,070 |
| 1 Bedroom | $1,090 |
| 2 Bedrooms | $1,440 |
| 3 Bedrooms | $1,750 |
| 4 Bedrooms | $2,070 |
| 5 Bedrooms | $2,401 |
| 6 Bedrooms | $2,689 |
| 7 Bedrooms | $2,904 |
| 8 Bedrooms | $3,049 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,440 | $386,808 | 0.37% | F |
| 3BR | $1,750 | $510,167 | 0.34% | F |
| 4BR | $2,070 | $602,521 | 0.34% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 81137 in Ignacio, Colorado, reveals a unique investment landscape. For a two-bedroom unit, the Fair Market Rent (FMR) for FY 2024 is set at $1,170 per month under the Section 8 program. Annualizing this figure yields an annual rental income of $14,040. In contrast, the market rent for a similar unit is $1,147 per month according to Census ACS data, resulting in an annual rental income of $13,764.
To derive the gross yield, we must consider the median home value in the area, which stands at $460,101. Using the Section 8 FMR, the implied gross yield is approximately 3.05%. This is calculated by dividing the annualized Section 8 rent ($14,040) by the median home value ($460,101). If we use the market rent instead, the implied gross yield drops slightly to about 2.99%, derived from the annual market rent ($13,764) divided by the median home value ($460,101).
The 22.0% renter density suggests that there is a reasonable demand for rental properties, including those under the Section 8 program. However, the lack of Days on Market (DOM) data complicates the analysis, as it would provide insight into how quickly properties are rented out. Despite this limitation, the higher FMR under Section 8 compared to the market rent indicates a potentially more stable and predictable cash flow for investors willing to participate in the program. The gross yield difference between the two scenarios is minimal, but the stability offered by Section 8 can be a significant factor for investors looking to minimize risk.
In conclusion, while both the Section 8 and market rent scenarios present a low gross yield, the slight edge in favor of the Section 8 FMR at 3.05% over the market rent scenario at 2.99% is worth considering. Given the current economic environment and the predictability of government-backed rents, the Section 8 option could offer a more secure investment opportunity despite the modest yield differential. Investors should weigh these factors carefully when deciding whether to enter the Ignacio, CO, market through Section 8 or the open rental market.
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.