Location: Flagstaff, AZ | Metro: Flagstaff, 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 | $1,450 |
| 1 Bedroom | $1,600 |
| 2 Bedrooms | $1,750 |
| 3 Bedrooms | $2,160 |
| 4 Bedrooms | $2,340 |
| 5 Bedrooms | $2,714 |
| 6 Bedrooms | $3,040 |
| 7 Bedrooms | $3,283 |
| 8 Bedrooms | $3,447 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,750 | $426,569 | 0.41% | F |
| 3BR | $2,160 | $687,274 | 0.31% | F |
| 4BR | $2,340 | $943,867 | 0.25% | F |
| 5BR | $2,714 | $1,315,625 | 0.21% | F |
U.S. Census Bureau data (2024)
The analysis of ZIP code 86005 in Flagstaff, Arizona, reveals several key insights for landlords and small-portfolio investors. Firstly, the rent math does not align favorably. The Fair Market Rent (FMR) for the zip code in fiscal year 2024 is set at $1860, which is significantly lower than the market rent of $2,153 as indicated by the Zillow Observed Rental Index (ZORI). This discrepancy suggests that landlords participating in the Section 8 program may face challenges in covering operational costs and achieving profitability.
Regarding the affordability of acquisitions, the median home value of $726,890 presents a high barrier to entry. However, the relatively short days on market (DOM) of 32 days and a low price-cut share of 0.2% indicate that homes in this area sell quickly and without significant price reductions. This could be advantageous for investors looking to acquire properties swiftly, though the initial investment remains substantial.
Tenant demand is robust in 86005. With a population of 17,961 and a renter share of 42.9%, there is a considerable pool of potential tenants. This strong demand supports the viability of rental investments, ensuring that properties are likely to remain occupied.
In conclusion, while the high median home value and quick sales suggest an active and competitive market for property acquisition, the disparity between FMR and market rent poses a challenge for profitability under the Section 8 program. Despite this, the strong tenant demand makes 86005 a viable location for rental investments, provided investors can navigate the financial constraints imposed by the FMR. For those willing to engage with the broader rental market beyond Section 8, the outlook is more promising.
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.