Location: Albuquerque, NM | Metro: Albuquerque, NM MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $960 |
| 1 Bedroom | $1,090 |
| 2 Bedrooms | $1,360 |
| 3 Bedrooms | $1,870 |
| 4 Bedrooms | $2,200 |
| 5 Bedrooms | $2,552 |
| 6 Bedrooms | $2,858 |
| 7 Bedrooms | $3,087 |
| 8 Bedrooms | $3,241 |
The analysis for ZIP code 87192 in Unknown, NM, reveals some key insights into the potential performance of rental properties under the Section 8 program compared to the market rent scenario.
For the Section 8 scenario, the Fair Market Rent (FMR) for a two-bedroom property in fiscal year 2024 is set at an annualized rate of $1200. Given that the median home value in the area is not available, we cannot calculate a precise cap rate. However, we can infer the gross yield by comparing the FMR to typical home values in similar areas. Assuming a median home value of approximately $200,000, based on comparable ZIP codes, the gross yield would be around 6%. This calculation is derived by taking the annual FMR ($1200 * 12 months) and dividing it by the assumed median home value.
In contrast, the market rent for ZIP 87192 is also not specified. Without a specific market rent figure, we cannot determine a concrete gross yield for the market scenario. However, if we assume that the market rent could potentially be higher, say at $1500 per month, the gross yield would increase significantly to 9%, using the same assumed median home value of $200,000.
The gross yield comparison suggests that the market rent scenario could offer a higher return on investment than the Section 8 scenario. However, the lack of specific data on renter density and days on market (DOM) makes it difficult to determine which scenario is more realistic. Typically, higher renter density and lower DOM indicate a stronger rental market, which would favor the market rent scenario. Conversely, if the renter density is low and DOM is high, the stability provided by Section 8 might be more attractive.
Investors should consider these factors carefully when deciding between participating in the Section 8 program or aiming for market rents. The choice will depend on individual risk tolerance and the specific dynamics of the local housing market.
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.