Location: Prescott Valley-Prescott, AZ | Metro: Prescott Valley-Prescott, AZ MSA
| 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 |
U.S. Census Bureau data (2024)
The Section 8 thesis for ZIP code 86329 is centered around the disparity between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1400, whereas the Census ACS data indicates a market rent of $1,347. This creates a positive gap of $53, representing an approximately 4% premium above the market rate.
This gap suggests that landlords who accept Section 8 vouchers can potentially benefit from higher yields compared to those renting at market rates. The premium allows for better cash flow and can offset the administrative costs associated with managing voucher properties. In a rental market where 25.3% of residents are renters, the demand for affordable housing options is significant, making the ZIP code an attractive location for landlords willing to work with the voucher program.
Despite the lower median income of $58,875, the availability of Section 8 vouchers can support tenant stability, which is crucial for maintaining a steady rental income. However, it's important to note that the median home value is listed as N/A, indicating limited data on homeownership values in the area. This could be due to a predominantly rental market or other factors affecting property valuation.
The cost of housing voucher tenants below open-market rates would typically not apply here since the FMR exceeds the market rent. But if FMR were to drop below market rent in future years, landlords might face challenges in covering maintenance and operational costs without additional subsidies. This scenario would reduce the attractiveness of the ZIP code for voucher tenants and could lead to a decrease in landlord participation in the program.
In summary, the current situation in ZIP 86329 presents an opportunity for landlords to achieve slightly higher rental yields through the Section 8 voucher program, given the 4% premium over market rents. This makes the ZIP code a favorable investment for those interested in generating consistent returns while providing affordable housing options.
Data Sources: FMR data from HUD (2027). 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.