Location: Tucson, AZ | Metro: Tucson, AZ MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $980 |
| 1 Bedroom | $1,100 |
| 2 Bedrooms | $1,410 |
| 3 Bedrooms | $1,950 |
| 4 Bedrooms | $2,220 |
| 5 Bedrooms | $2,575 |
| 6 Bedrooms | $2,884 |
| 7 Bedrooms | $3,115 |
| 8 Bedrooms | $3,271 |
The decision to invest in ZIP 85702 for Section 8 properties hinges on three key factors: Fair Market Rent (FMR), market rent comparison, and demand indicators.
1) Does the FMR of $1340 cover the debt service?
Yes: If the landlord's debt service on a property in ZIP 85702 is less than $1340, then the FMR clears the debt service. This means the landlord can rely on Section 8 tenants to cover their mortgage payments without loss.
No: If the debt service exceeds $1340, the landlord will incur a financial loss each month, making it unwise to purchase a property solely for Section 8 tenants.
It Depends: The answer to this question cannot be determined without knowing the specific debt service amount for the property in question. Landlords must calculate their monthly mortgage obligations to see if they align with the FMR.
2) Is the market rent above, at, or below the FMR?
Above: If the market rent is higher than $1340, landlords might find it more profitable to rent to non-Section 8 tenants who can pay the higher rate. However, this also suggests that the area is desirable and has strong rental demand.
At: If the market rent matches the FMR, landlords can expect to break even with Section 8 tenants. This scenario is neutral but ensures stability given the government backing of Section 8 payments.
Below: If the market rent is lower than $1340, landlords could potentially benefit from the higher guaranteed income from Section 8 tenants compared to what the market would offer.
It Depends: The exact market rent figure is not provided, so landlords need to research local listings to determine where the market stands relative to the FMR.
3) Is there sufficient demand?
Yes: If the percentage of renters in ZIP 85702 is high and days on the market (DOM) for rental listings are low, there is likely strong demand for rental properties. This indicates a good chance of maintaining occupancy rates.
No: If the percentage of renters is low and DOM is high, it suggests weak demand. Landlords might struggle to fill vacancies, making investment risky.
It Depends: The necessary data regarding the percentage of renters and DOM are missing. To make an informed decision, landlords must gather these figures to assess the rental market's health.
To conclude, purchasing a property in ZIP 85702 for Section 8 tenants is contingent upon the FMR covering debt service, market rents being competitive, and sufficient demand for rentals. Without specific figures for market rent and demand metrics, the final decision relies heavily on the landlord's own calculations and further research.
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.