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 | $1,550 |
| 1 Bedroom | $1,660 |
| 2 Bedrooms | $1,930 |
| 3 Bedrooms | $2,560 |
| 4 Bedrooms | $2,840 |
| 5 Bedrooms | $3,294 |
| 6 Bedrooms | $3,689 |
| 7 Bedrooms | $3,984 |
| 8 Bedrooms | $4,183 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,660 | $247,370 | 0.67% | D |
| 2BR | $1,930 | $470,790 | 0.41% | F |
| 3BR | $2,560 | $680,747 | 0.38% | F |
| 4BR | $2,840 | $861,635 | 0.33% | F |
| 5BR | $3,294 | $1,560,112 | 0.21% | F |
U.S. Census Bureau data (2024)
The classification of ZIP code 85250 in Scottsdale, AZ, hinges on the analysis of its yield and stability metrics. On the yield axis, the Fair Market Rent (FMR) for the fiscal year 2024 stands at $2,190, which is notably lower than the market rent of $2,619. This suggests that there is potential for higher rental yields if properties can be leased at or near market rates. However, the average home value of $620,911 indicates a relatively expensive market, which could limit the number of units available to investors looking for affordable acquisitions.
Moving to the stability axis, the data reveals that only 21.9% of residents are renters, which points to a less stable market for rental investments. Additionally, the Days on Market (DOM) figure of 42 days implies a moderate level of difficulty in leasing out properties. Despite these indicators, the median household income of $95,761 provides some reassurance regarding the ability of tenants to meet their financial obligations.
Based on these figures, ZIP 85250 does not fit neatly into either a high-yield/low-stability 'flip-style' market or a steady-cashflow zone. Instead, it occupies a middle ground. The lower FMR compared to market rent allows for potential above-average yields, but the high home values and low percentage of renters suggest that the market is not highly volatile or conducive to quick property flips. Meanwhile, the relatively high median income offers some stability in terms of tenant reliability, though the moderate DOM figure indicates that finding tenants might require some effort.
To summarize, while there is room for higher yields due to the discrepancy between FMR and market rents, the overall stability is compromised by the limited rental population and moderately challenging leasing conditions. Therefore, for landlords and small-portfolio investors, ZIP 85250 represents a balanced opportunity that requires careful consideration of both potential returns and the challenges in maintaining consistent cash flow.
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.