Location: Phoenix-Mesa-Chandler, AZ | Metro: Phoenix-Mesa-Chandler, AZ MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,400 |
| 1 Bedroom | $1,500 |
| 2 Bedrooms | $1,740 |
| 3 Bedrooms | $2,300 |
| 4 Bedrooms | $2,550 |
| 5 Bedrooms | $2,958 |
| 6 Bedrooms | $3,313 |
| 7 Bedrooms | $3,578 |
| 8 Bedrooms | $3,757 |
The Section 8 housing market in ZIP code 85078, located in Phoenix-Mesa-Chandler County, Arizona, presents a unique challenge for landlords and small-portfolio investors due to the fixed Fair Market Rent (FMR) rate set by HUD at $1880 for fiscal year 2024. This rate is crucial because it dictates the maximum amount that can be charged to voucher tenants. However, without specific data on the current market rents in this area, it's difficult to provide a precise comparison.
Based on the HUD FMR alone, voucher tenants would likely cashflow at the $1880 rate only if they are living in premium units that justify this higher rent. Standard or below-average units would struggle to maintain positive cashflow at this rate, especially considering the costs associated with property management, maintenance, and other expenses. The lack of data on median home values means we cannot accurately calculate the rent-to-price ratio, which is an important metric for understanding the financial health of rental properties relative to homeownership.
The dynamics between renting and buying in this market are also unclear without additional information on the median days on market (DOM) and the percentage of price cuts. These figures would help us understand how quickly homes are selling and if there's a significant discount trend among sellers, which could impact the attractiveness of owning versus renting.
Despite these limitations, the strongest investor angle in ZIP 85078 appears to be stability. With the consistent income stream provided by the Section 8 program, investors can rely on predictable cash flows, even if the initial rates do not fully cover operating costs. This predictability is particularly valuable in volatile markets where rental prices and home values can fluctuate widely.
Data Sources: FMR data from HUD (2027).
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.