Location: Prescott Valley-Prescott, AZ | Metro: Prescott Valley-Prescott, 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 | $1,020 |
| 1 Bedroom | $1,180 |
| 2 Bedrooms | $1,480 |
| 3 Bedrooms | $2,050 |
| 4 Bedrooms | $2,250 |
| 5 Bedrooms | $2,610 |
| 6 Bedrooms | $2,923 |
| 7 Bedrooms | $3,157 |
| 8 Bedrooms | $3,315 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,480 | $355,125 | 0.42% | F |
| 3BR | $2,050 | $490,265 | 0.42% | F |
| 4BR | $2,250 | $574,883 | 0.39% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis for ZIP code 86323, located in Chino Valley, AZ, is centered around the discrepancy between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1320, while the Census American Community Survey (ACS) indicates that the market rent stands at $1258. This means that the FMR is $62 higher than the market rent, representing a 4.9% premium.
The higher FMR compared to the market rent makes this area a yield play for landlords and small-portfolio investors who can secure Section 8 tenants. Despite the lower overall rental rate in Chino Valley, where only 12.0% of residents are renters, the FMR provides a guaranteed income that exceeds the typical market rent. This ensures a steady cash flow and protects against potential rent defaults, which can be common in areas with a low median income of $62,603.
However, it's important to note that accepting Section 8 tenants comes with its own set of costs. These include the administrative burden of working with the Housing Choice Voucher program, potential delays in rent payments, and the need to maintain properties to meet program standards. The median home value in Chino Valley is $500,343, indicating that homeownership is the dominant trend in the area, but for those willing to navigate the challenges of the Section 8 program, there is an opportunity to generate above-market yields.
To summarize, the gap between the FMR and the market rent in Chino Valley, AZ, makes it an attractive investment opportunity for those who can manage the intricacies of the Section 8 program. The 4.9% premium offered by the FMR over the market rent provides a compelling reason to consider this area for rental investments, especially given the economic context of the region.
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.