Location: Grand Junction, CO | Metro: Grand Junction, 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 | $950 |
| 1 Bedroom | $1,030 |
| 2 Bedrooms | $1,320 |
| 3 Bedrooms | $1,820 |
| 4 Bedrooms | $2,200 |
| 5 Bedrooms | $2,552 |
| 6 Bedrooms | $2,858 |
| 7 Bedrooms | $3,087 |
| 8 Bedrooms | $3,241 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,320 | $471,357 | 0.28% | F |
| 3BR | $1,820 | $551,274 | 0.33% | F |
| 4BR | $2,200 | $689,870 | 0.32% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 81527, located in Whitewater, CO, provides a detailed look at potential investment yields based on Fair Market Rent (FMR) and market rent data.
For a two-bedroom unit, the annualized FMR for FY 2024 is $1120 per month. This translates to an annual rental income of $13,440. Given the median home value in the area is $559,519, the implied gross yield using FMR would be approximately 2.4%. The calculation is straightforward: divide the annual rental income by the property value ($13,440 / $559,519 = 0.024).
In contrast, the market rent for a similar two-bedroom unit is reported at $1,289 per month according to Census ACS data. This results in an annual rental income of $15,468, leading to an implied gross yield of about 2.76%. The calculation follows the same logic: $15,468 divided by $559,519 equals 0.0276.
Evaluating these yields, the market rent scenario presents a higher gross yield compared to the FMR scenario. However, the decision between the two should consider the local rental market dynamics. With a renter density of 17.5%, it suggests that while there is demand for rentals, it's not overwhelming, which could affect the occupancy rate and thus the actual income generated. The N/A-day DOM (days on market) indicates incomplete data regarding how quickly properties are rented, which is crucial for understanding vacancy rates and the speed at which you can expect to fill your units.
Given the higher gross yield from market rent, it is generally more attractive for investors seeking immediate cash flow. However, the stability of rental income under the Section 8 program must also be considered. While the FMR scenario offers a lower gross yield at 2.4%, it provides a guaranteed tenant through the Section 8 program, reducing risk and vacancy concerns. For small-portfolio investors and landlords, the choice depends on whether they prioritize a slightly higher yield or prefer the security and predictability of Section 8 tenancy.
In summary, the gross yields derived from FMR and market rent data provide a benchmark for potential returns in ZIP 81527. Market rent offers a better immediate cash flow at 2.76%, whereas FMR under Section 8 ensures steady income at 2.4%. Investors should weigh these factors against their 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.