Location: McKinley County, NM | Metro: Farmington, NM MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $800 |
| 1 Bedroom | $860 |
| 2 Bedrooms | $1,090 |
| 3 Bedrooms | $1,360 |
| 4 Bedrooms | $1,490 |
| 5 Bedrooms | $1,728 |
| 6 Bedrooms | $1,935 |
| 7 Bedrooms | $2,090 |
| 8 Bedrooms | $2,195 |
U.S. Census Bureau data (2024)
The analysis of ZIP code 87325 reveals a unique balance between yield and stability that can inform investment strategies for both landlords and small-portfolio investors. The Fair Market Rent (FMR) for the fiscal year 2024 is set at $880, which stands significantly above the market rent of $575. This indicates a potential for higher rental yields if properties can be rented at or near the FMR.
To understand the yield potential more clearly, consider the following figures. The FMR of $880 suggests that tenants are willing to pay a premium for housing in this area. However, the current market rent of $575 implies that there is room for price increases, potentially leading to higher cash flows. The absence of a figure for home values indicates that the market might be less focused on property appreciation and more on rental income.
Moving to the stability axis, ZIP 87325 shows a 14.8% rate of renters, which is relatively low. A lower percentage of renters could mean that there is less demand for rental properties, making it harder to find tenants. Additionally, the lack of data on days on market (DOM) suggests that there is limited information on how quickly properties are leased once they become available. The average income of $36,800 provides some insight into the economic profile of the residents but does not directly correlate to rental stability.
Based on these figures, ZIP 87325 does not fit neatly into either a high-yield/low-stability flip-style market or a steady-cashflow zone. Instead, it represents a middle ground where there is potential for significant rental income due to the disparity between the FMR and the current market rent. However, the lower percentage of renters and the uncertainty around DOM indicate that maintaining a steady occupancy might be challenging.
For landlords and small-portfolio investors, this means that while the potential for higher rental yields exists, there will likely be a need to actively manage tenant acquisition and retention to ensure consistent cash flow. Investing in this area should be approached with an understanding of the local rental dynamics and a strategy to leverage the higher FMR to attract tenants.
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.