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 | $1,430 |
| 1 Bedroom | $1,540 |
| 2 Bedrooms | $1,800 |
| 3 Bedrooms | $2,390 |
| 4 Bedrooms | $2,650 |
| 5 Bedrooms | $3,074 |
| 6 Bedrooms | $3,443 |
| 7 Bedrooms | $3,718 |
| 8 Bedrooms | $3,904 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,540 | $186,966 | 0.82% | C |
| 2BR | $1,800 | $328,258 | 0.55% | F |
| 3BR | $2,390 | $409,286 | 0.58% | F |
| 4BR | $2,650 | $482,686 | 0.55% | F |
| 5BR | $3,074 | $658,100 | 0.47% | F |
U.S. Census Bureau data (2024)
The potential risks for a Section 8 investment in ZIP 85206 in Mesa, AZ, are significant. First, tenant turnover poses a challenge due to the discrepancy between the market rent of $1,636 and the Fair Market Rent (FMR) of $1,910 for FY 2024. This difference suggests that tenants may struggle to afford the rent, leading to higher turnover rates and increased costs for landlords.
Vacancy exposure is another concern, given that the average Days on Market (DOM) is 25 days. A shorter DOM indicates a competitive rental market, but it also implies that vacancies can occur if units are not priced correctly or maintained to attract tenants.
Deferred maintenance is a critical issue, especially considering the typical home value of $384,886 and the median income of $75,607. The median income is relatively low compared to the home values, which may limit the ability of residents to contribute to the upkeep of their homes. Landlords must be prepared to cover maintenance costs to ensure the property remains in good condition.
However, these risks are balanced by the high renter share in the area, which stands at 36.3%. High renter density generally translates into higher demand for housing vouchers, making it easier to find tenants who can benefit from Section 8 assistance. This demand helps mitigate some of the risks associated with vacancy and turnover.
In conclusion, the verdict for a first-time Section 8 landlord in ZIP 85206 is moderate risk.
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.