Location: Logan, UT | Metro: Logan, UT-ID MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $990 |
| 1 Bedroom | $990 |
| 2 Bedrooms | $1,300 |
| 3 Bedrooms | $1,800 |
| 4 Bedrooms | $2,160 |
| 5 Bedrooms | $2,506 |
| 6 Bedrooms | $2,807 |
| 7 Bedrooms | $3,032 |
| 8 Bedrooms | $3,184 |
U.S. Census Bureau data (2024)
A skeptical investor considering ZIP 84326 might raise several concerns regarding the viability of investing in rental properties under Section 8. Here are some key objections and the data to address them.
Objection 1: Will FMR $1150 (zip FY 2024) cover the mortgage on a $551,791 home?
The Fair Market Rent (FMR) for ZIP 84326 in fiscal year 2024 is set at $1150. This amount represents the maximum monthly rent that a landlord can charge for a unit covered under the Section 8 program. To determine if this FMR will cover the mortgage on a $551,791 home, we need to consider the interest rates and loan terms. Assuming a typical 30-year fixed-rate mortgage with an average interest rate of around 5%, the monthly mortgage payment would be approximately $2950. Clearly, the FMR of $1150 does not cover the mortgage payment, leaving a significant gap. Landlords must rely on other income sources or consider lower-priced homes to ensure financial stability.
Objection 2: Is there enough renter demand at 5.9%?
The occupancy rate for ZIP 84326 stands at 5.9%. This figure suggests that while there is some demand for rental units, it is relatively low compared to national averages, which often hover around 10% or higher. With only 5.9% of units occupied, an investor might question whether there are sufficient tenants willing to pay the FMR. However, the low occupancy rate could also indicate an untapped market or potential for growth. To accurately assess demand, one would need to look at trends over time and compare against local economic indicators. The data does not provide a comprehensive view of future demand, so caution is advised.
Objection 3: Will vouchers keep pace with $830 market rents?
The current market rent for ZIP 84326 is $830, which is below the FMR of $1150. This discrepancy suggests that there may be some flexibility in pricing for Section 8 properties. However, the critical question is whether voucher amounts will increase to match any rise in market rents. The data does not provide specific information on the trajectory of voucher payments. Historically, voucher amounts have been adjusted annually based on the Department of Housing and Urban Development's (HUD) calculations, but these adjustments do not always align perfectly with market conditions. Therefore, while the current FMR provides a buffer above market rents, long-term planning should account for potential discrepancies between voucher increases and actual rent hikes.
In conclusion, while ZIP 84326 offers opportunities for investment under the Section 8 program, careful consideration of the financials and market dynamics is essential. The data clearly shows that the FMR will not cover the mortgage on a $551,791 home, and the occupancy rate indicates a need for further investigation into tenant demand. Lastly, the relationship between voucher payments and market rents requires ongoing monitoring to ensure sustained profitability.
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.