Location: Apache County, AZ | Metro: Apache County, AZ
| Unit Size | Monthly FMR |
|---|---|
| Studio | $750 |
| 1 Bedroom | $820 |
| 2 Bedrooms | $1,070 |
| 3 Bedrooms | $1,480 |
| 4 Bedrooms | $1,790 |
| 5 Bedrooms | $2,076 |
| 6 Bedrooms | $2,325 |
| 7 Bedrooms | $2,511 |
| 8 Bedrooms | $2,637 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 86506 provides a snapshot of potential investment returns under different rental scenarios. The annualized Fair Market Rent (FMR) for a two-bedroom apartment in the metropolitan area for fiscal year 2026 is set at $1,180. This figure represents the government's benchmark for determining rental assistance payments.
Assuming a two-bedroom apartment in ZIP 86506 rents at the FMR, the annual rental income would be $14,160. However, the median home value in this ZIP code is not available, making it challenging to calculate a precise cap rate based on property value. For the sake of analysis, let's consider a hypothetical median home value of $300,000, which is a reasonable estimate for many suburban areas. In this scenario, the implied gross yield would be approximately 4.72% ($14,160 / $300,000).
The current market rent for ZIP 86506 is also not available, which suggests that the rental market might be less active or data is sparse. If we were to assume the market rent aligns with the FMR, the analysis remains the same. However, if the market rent is higher, the gross yield would increase accordingly. For instance, if the market rent for a two-bedroom was $1,500 per month, the gross yield would rise to 6.06% ($18,000 / $300,000).
Given the 4.7% renter density, it is evident that the majority of residents in ZIP 86506 are likely homeowners rather than renters. This low density implies that the demand for rental properties, including those eligible for Section 8, may be limited. Additionally, the lack of Days on Market (DOM) data further complicates the assessment of how quickly properties might be leased, especially under Section 8.
In conclusion, while the implied gross yields of 4.72% and 6.06% offer a comparative view between renting at FMR and potentially higher market rates, the actual performance hinges on several factors, including the specific property's condition, location, and the overall rental market dynamics. The lower renter density suggests that the FMR scenario is more realistic for Section 8 investments, although achieving a higher market rent could significantly improve the gross yield.
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.