Location: Phoenix-Mesa-Chandler, AZ | Metro: Phoenix-Mesa-Chandler, AZ MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,520 |
| 1 Bedroom | $1,650 |
| 2 Bedrooms | $1,910 |
| 3 Bedrooms | $2,550 |
| 4 Bedrooms | $2,830 |
| 5 Bedrooms | $3,283 |
| 6 Bedrooms | $3,677 |
| 7 Bedrooms | $3,971 |
| 8 Bedrooms | $4,170 |
U.S. Census Bureau data (2024)
The analysis of ZIP 85016 in Phoenix, AZ, reveals a unique balance between yield and stability that is attractive for both landlords and small-portfolio investors. The Fair Market Rent (FMR) for the fiscal year 2024 is set at $2020, which is notably lower than the market rent of $1638. This suggests a potential for higher yields when utilizing Section 8 housing vouchers, as the gap between FMR and market rates indicates a subsidy that can cover a significant portion of rental costs.
Moreover, the median home value in ZIP 85016 is $525,212, which is substantial but does not necessarily translate into a low-stability environment. Stability is bolstered by the fact that 48.9% of residents are renters, indicating a robust demand for rental properties. The days on market (DOM) average is 37 days, which is relatively quick, suggesting that rental units turn over swiftly and there is a consistent flow of tenants.
Income levels also contribute to the stability of this area. With an average household income of $87,850, tenants have a solid financial base to support their rental payments. However, it's important to note that the income figure alone doesn't guarantee stability; the percentage of renters and the DOM average provide additional context that supports a stable rental market.
Based on these figures, ZIP 85016 leans towards being a high-yield market due to the disparity between FMR and market rents, allowing for greater profit margins when using Section 8 vouchers. Yet, it maintains a level of stability through the strong rental demand and reasonable DOM averages. This makes it neither a pure flip-style market nor a steady-cashflow zone, but rather a hybrid where investors can enjoy decent cash flow while also benefiting from the higher yields associated with subsidized housing.
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.