Location: Lake Havasu City-Kingman, AZ | Metro: Lake Havasu City-Kingman, AZ MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $990 |
| 1 Bedroom | $990 |
| 2 Bedrooms | $1,240 |
| 3 Bedrooms | $1,710 |
| 4 Bedrooms | $1,890 |
| 5 Bedrooms | $2,192 |
| 6 Bedrooms | $2,455 |
| 7 Bedrooms | $2,651 |
| 8 Bedrooms | $2,784 |
The analysis of the Section 8 cap-rate for ZIP code 86402 in Unknown, Arizona, reveals a complex picture due to the lack of specific data points. However, we can still provide some insight based on the available information.
The Fair Market Rent (FMR) for a two-bedroom apartment in ZIP 86402 for fiscal year 2024 is set at $1210 per month. Annualizing this figure gives us an annual rental income of $14,520. This is the maximum allowable rent that a landlord can charge under the Section 8 program for such units.
Unfortunately, the median home value for ZIP 86402 is not available, which makes it difficult to calculate the implied gross yield for market rents. The absence of this data point also means that we cannot directly compare the gross yields between the Section 8 scenario and the market rent scenario.
In the context of Section 8, the gross yield would be calculated by taking the annualized rental income ($14,520) and dividing it by the property's value. Without a specific property value, we cannot provide an exact gross yield percentage, but it's important to note that this calculation is crucial for determining the investment's potential profitability.
The lack of market rent data complicates the analysis further. Typically, if market rents were higher than the Section 8 FMR, the gross yield for market rents would be higher, implying better financial performance outside the program. Conversely, if market rents were lower, the Section 8 program might offer a more stable and predictable income stream.
Given the unknowns about the local rental market, including the percentage of renters and the days on market (DOM), it's challenging to determine which scenario is more realistic. A high renter density and low DOM could suggest strong demand for rental properties, potentially favoring market rents over Section 8 participation. However, these factors are not quantified here.
Landlords and small-portfolio investors should consider the stability of Section 8 payments versus the potential volatility of market rents when making investment decisions. While the exact gross yield comparison cannot be made due to missing data, understanding the implications of each scenario is key to strategic decision-making.
Data Sources: FMR data from HUD (2027).
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.