Location: Prescott Valley-Prescott, 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 | $1,440 |
| 1 Bedroom | $1,560 |
| 2 Bedrooms | $1,730 |
| 3 Bedrooms | $2,300 |
| 4 Bedrooms | $2,500 |
| 5 Bedrooms | $2,900 |
| 6 Bedrooms | $3,248 |
| 7 Bedrooms | $3,508 |
| 8 Bedrooms | $3,683 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,730 | $659,841 | 0.26% | F |
| 3BR | $2,300 | $1,089,548 | 0.21% | F |
| 4BR | $2,500 | $1,533,999 | 0.16% | F |
| 5BR | $2,900 | $2,063,416 | 0.14% | F |
U.S. Census Bureau data (2024)
The potential pitfalls of investing in ZIP 86336 in Sedona, AZ, under the Section 8 program are significant. First, consider the disparity between the market rent of $2,691 and the Fair Market Rent (FMR) of $1750 for FY 2024. This gap suggests a high risk of tenant turnover, as many voucher holders may struggle to cover the difference. Additionally, with an average Days on Market (DOM) of 34 days, there is substantial exposure to vacancy periods, which can impact cash flow negatively. The typical home value in the area is $1,001,305, while the median income stands at $68,435. This combination indicates that deferred maintenance could become a critical issue, as lower-income tenants might not have the resources to maintain the property at a high standard.
However, these risks must be weighed against the strong demand for rental properties in the area. The renter share of the population is 27.4%, which is relatively high and suggests a robust demand for housing vouchers. High renter density often correlates with higher demand for Section 8 vouchers, potentially stabilizing occupancy rates over time.
In conclusion, the investment in ZIP 86336 as a first-time Section 8 landlord presents moderate risk. While the financial challenges are evident, the high renter share provides some assurance of consistent demand for subsidized housing.
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.