Location: Phoenix-Mesa-Chandler, AZ | Metro: Phoenix-Mesa-Chandler, AZ 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 | $1,750 |
| 1 Bedroom | $1,880 |
| 2 Bedrooms | $2,180 |
| 3 Bedrooms | $2,880 |
| 4 Bedrooms | $3,190 |
| 5 Bedrooms | $3,700 |
| 6 Bedrooms | $4,144 |
| 7 Bedrooms | $4,476 |
| 8 Bedrooms | $4,700 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,880 | $211,556 | 0.89% | C |
| 2BR | $2,180 | $313,906 | 0.69% | D |
| 3BR | $2,880 | $490,145 | 0.59% | F |
| 4BR | $3,190 | $662,942 | 0.48% | F |
| 5BR | $3,700 | $809,870 | 0.46% | F |
U.S. Census Bureau data (2024)
The market analysis for Section 8 investors targeting ZIP code 85048 in Phoenix, Arizona reveals a favorable environment for cash flow generation. The HUD Fair Market Rent (FMR) for FY 2024 is set at $2370, which is notably higher than the current market rent, measured by Zillow's Rent Index (ZORI), at $1,918. This discrepancy means that voucher tenants will cashflow at FMR, providing landlords with a consistent positive cash flow without the need for premium units.
To further contextualize this opportunity, consider the median home value in ZIP 85048, which stands at $585,790. This yields a rent-to-price ratio of approximately 0.33%, indicating that rental income is relatively low compared to property values. However, given the high demand for affordable housing and the generous FMR, this ratio is less critical for cash flow-focused investors.
The real estate market in ZIP 85048 also shows strong liquidity, with a median Days on Market (DOM) of just 18 days and a price-cut share of only 0.4%. These metrics suggest that properties are quickly sold without significant price reductions, which can be advantageous for investors considering the buy-and-rent strategy. While the low price-cut share indicates stability in property values, the quick sale times could signal a competitive resale market, making rental income more predictable and valuable.
The strongest investor angle in ZIP 85048 is cash flow. With voucher tenants paying above market rates and the robust demand for rental properties, investors can expect steady and reliable returns from their investments.
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.