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 | $1,230 |
| 1 Bedroom | $1,420 |
| 2 Bedrooms | $1,770 |
| 3 Bedrooms | $2,450 |
| 4 Bedrooms | $2,620 |
| 5 Bedrooms | $3,039 |
| 6 Bedrooms | $3,404 |
| 7 Bedrooms | $3,676 |
| 8 Bedrooms | $3,860 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,770 | $430,221 | 0.41% | F |
| 3BR | $2,450 | $561,292 | 0.44% | F |
| 4BR | $2,620 | $651,044 | 0.4% | F |
U.S. Census Bureau data (2024)
Skeptical investors often question the viability of investing in ZIP 86325, specifically Cornville, Arizona, due to concerns about financial returns and tenant demand. Let's address these concerns head-on.
The first objection is whether the Fair Market Rent (FMR) of $1,800 for ZIP 86325 in fiscal year 2024 can cover the mortgage on a home valued at $527,153. To evaluate this, we must consider the typical mortgage rates and terms. Assuming a 30-year fixed-rate mortgage at an average rate of 5%, the monthly payment on a $527,153 home would be approximately $2,835. Clearly, the FMR of $1,800 is insufficient to cover the mortgage payment alone. However, it's important to note that the FMR represents the maximum amount a landlord can charge for a Section 8 voucher, which does not necessarily mean the actual rent will always reach this level. Landlords might need to supplement their income through other means or consider properties with lower purchase prices.
The second concern revolves around the rental demand in Cornville, with only 14.5% of the housing units being rented. This percentage suggests a relatively low demand for rentals compared to other areas. However, the actual number of rental units can provide more context. With a total of 1,400 housing units, 14.5% translates to roughly 203 rental units. While this may seem modest, it's crucial to assess the local job market and population trends to understand if there is potential for growth in rental demand. The data does not provide detailed projections for future demand, so investors should conduct further research into local economic indicators and trends.
The final objection pertains to whether Section 8 vouchers will keep pace with the market rents of $1,639. The FMR of $1,800 is higher than the current market rent, indicating that voucher holders could potentially afford market-rate rents. However, the FMR is set annually and might not adjust quickly to rapid changes in the market. Investors should monitor both the FMR and market rent trends closely to ensure that they remain aligned. If the gap between the two widens, landlords might face challenges in covering their expenses solely through voucher payments.
In summary, while the FMR of $1,800 may not fully cover the mortgage on a $527,153 home, it provides a benchmark for rental pricing. The rental demand at 14.5% is low but still represents a viable number of units. Lastly, the alignment between the FMR and market rents currently supports Section 8 investments, though vigilant monitoring is advised.
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.