Location: Socorro County, NM | Metro: Albuquerque, NM 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 | $910 |
| 1 Bedroom | $1,070 |
| 2 Bedrooms | $1,320 |
| 3 Bedrooms | $1,840 |
| 4 Bedrooms | $2,160 |
| 5 Bedrooms | $2,506 |
| 6 Bedrooms | $2,807 |
| 7 Bedrooms | $3,032 |
| 8 Bedrooms | $3,184 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,320 | $204,799 | 0.64% | D |
| 3BR | $1,840 | $277,186 | 0.66% | D |
| 4BR | $2,160 | $332,667 | 0.65% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate picture for ZIP 87002 (Belen, NM) reveals some interesting dynamics when comparing the Federal Market Rent (FMR) and the actual market rent. Using the annualized figures for a 2-bedroom unit, the FMR stands at $1050 per month, while the Zillow Observed Rent Index (ZORI) indicates a market rent of $1,238 per month. These figures can be used to derive the gross yield for both scenarios.
In the case of the FMR, the annual rental income would be $12,600 ($1050 x 12 months). Given the median home value of $267,487, the implied gross yield from Section 8 participation is approximately 4.7%. This calculation is derived from the formula: Gross Yield = Annual Rental Income / Property Value. On the other hand, if we consider the market rent of $1,238 per month, the annual rental income increases to $14,856 ($1,238 x 12 months). This results in an implied gross yield of about 5.5% when compared to the median home value.
Evaluating these gross yields against the local context of Belen, NM, provides insight into which scenario is more realistic. With a renter density of 17.7%, it's evident that a significant portion of the population may be seeking affordable housing options, making Section 8 participation a viable consideration for landlords. However, the N/A-day DOM (Days on Market) suggests that there is limited data available regarding how quickly properties are rented out, which could indicate either a robust demand or a less active real estate market.
Given the higher gross yield from market rent, it might seem more attractive at first glance. However, the lower gross yield from FMR participation should also be considered in light of the stability and security that government-backed tenants provide. The choice between these two scenarios ultimately depends on the landlord's risk tolerance and investment goals. For those prioritizing steady cash flow and lower vacancy rates, the FMR participation at 4.7% gross yield is likely more appealing. Conversely, landlords willing to navigate the potentially higher turnover associated with market rent may find the 5.5% gross yield more compelling.
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.