Location: Tooele County, UT | Metro: Tooele County, UT HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $820 |
| 1 Bedroom | $860 |
| 2 Bedrooms | $1,120 |
| 3 Bedrooms | $1,510 |
| 4 Bedrooms | $1,880 |
| 5 Bedrooms | $2,181 |
| 6 Bedrooms | $2,443 |
| 7 Bedrooms | $2,638 |
| 8 Bedrooms | $2,770 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 84083 reveals interesting insights into the potential rental income and gross yields for landlords and small-portfolio investors.
In ZIP 84083, the annualized Fair Market Rent (FMR) for a 2-bedroom apartment in fiscal year 2024 is set at $1050 per month. This translates to an annual rental income of $12,600. However, the Census American Community Survey (ACS) indicates that the current market rent for a similar unit is $675 per month, equating to an annual rental income of $8,100.
The median home value is not available for ZIP 84083, which complicates the direct calculation of a cap-rate. Nonetheless, we can derive the implied gross yield from the given rental figures. If we consider the FMR of $1050 per month, the gross yield would be higher compared to the market rent of $675 per month.
To determine which scenario is more realistic, we must consider the 74.6% renter density in ZIP 84083. This high percentage suggests a strong demand for rental properties, potentially favoring the higher FMR rate. Additionally, the days-on-market (DOM) figure is not available, which could indicate either a fast-moving market or a lack of recent sales data. Given the high renter density, it's reasonable to assume that rental units, particularly those under Section 8, might be occupied quickly, supporting the use of the FMR rate for estimating gross yields.
The gross yield based on the FMR rate of $1050 per month is significantly better than the market rent of $675 per month. For instance, if a property were valued at $150,000, the gross yield at FMR would be approximately 8.4%, while at market rent, it would drop to about 5.4%. These figures highlight the financial advantage of utilizing the FMR rate for Section 8 properties over relying solely on the market rent.
In conclusion, for ZIP 84083, landlords and small-portfolio investors should consider the FMR rate of $1050 per month as a more realistic basis for estimating gross yields, especially given the high renter density. This approach provides a clearer picture of the potential returns from Section 8 properties in this area.
Data Sources: FMR data from HUD (2027). 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.