Location: Prescott Valley-Prescott, 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 | $1,080 |
| 1 Bedroom | $1,170 |
| 2 Bedrooms | $1,380 |
| 3 Bedrooms | $1,870 |
| 4 Bedrooms | $2,120 |
| 5 Bedrooms | $2,459 |
| 6 Bedrooms | $2,754 |
| 7 Bedrooms | $2,974 |
| 8 Bedrooms | $3,123 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,870 | $345,612 | 0.54% | F |
U.S. Census Bureau data (2024)
ZIP 85342, located within the Prescott Valley-Prescott, AZ MSA, serves as a cash-flow anchor within a Section 8 portfolio strategy. The Federal Market Rent (FMR) for the area in fiscal year 2024 is set at $1570, which is significantly higher than the market rent of $850 for a similar unit. This $720 difference ensures that landlords receive a substantial subsidy, covering the gap between the tenant's payment and the actual rental cost.
The median home value of $405,958 in ZIP 85342 suggests that the area is relatively stable and not prone to rapid appreciation, making it less suitable as an appreciation play. With a 0.2% price-cut share and N/A-day days on market (DOM), there is little evidence of distressed properties or a highly competitive market, further supporting the cash-flow anchor classification.
The diversification potential of ZIP 85342 is limited by its renter share of 9.7%, indicating that the majority of residents are homeowners. While the median income of $55,917 might suggest some economic stability, it does not necessarily contribute to the diversification of a portfolio focused on rental income.
In summary, ZIP 85342 should be considered as a cash-flow anchor due to the substantial spread between the FMR and market rent. Landlords can rely on steady subsidies to ensure profitability and consistent cash flow, even if the area does not offer significant opportunities for property value appreciation or broad diversification within their investment portfolios.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.