Location: Rio Arriba County, NM | Metro: Rio Arriba County, NM
| Unit Size | Monthly FMR |
|---|---|
| Studio | $820 |
| 1 Bedroom | $830 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,400 |
| 4 Bedrooms | $1,610 |
| 5 Bedrooms | $1,868 |
| 6 Bedrooms | $2,092 |
| 7 Bedrooms | $2,259 |
| 8 Bedrooms | $2,372 |
U.S. Census Bureau data (2024)
The analysis of Section 8 cap rates for ZIP code 87516 presents a unique challenge due to the limited data available. The Fair Market Rent (FMR) for a two-bedroom apartment in this area for fiscal year 2026 is set at $970 per month. To annualize this figure, we multiply it by 12, resulting in an annual rental income of $11,640.
The median home value in ZIP 87516 is not available, which makes direct comparisons between the FMR and market rents difficult. However, if we assume that the typical investment property in this area could be valued similarly to other comparable markets, we can still derive some useful insights.
In the scenario where the market rent is unknown, we rely solely on the FMR to calculate the implied gross yield. Given that the median home value is not provided, let's consider a hypothetical median home value of $250,000, which is a common benchmark in many areas. With an annual rental income of $11,640, the implied gross yield would be approximately 4.65%. This calculation is derived by dividing the annual rental income ($11,640) by the hypothetical median home value ($250,000).
The 0.0% renter density in ZIP 87516 suggests that very few residents are currently utilizing Section 8 vouchers, which could indicate a low demand for subsidized housing. This factor should be considered when evaluating the potential success of a Section 8 property in this area.
The days on market (DOM) being listed as N/A implies that there is insufficient data to determine how long properties typically remain unsold or unrented. This lack of information makes it challenging to predict the speed at which an investment property might be occupied, particularly under a Section 8 program.
Given the absence of market rent data and the low renter density, the FMR-based gross yield of 4.65% provides a clearer picture for potential investors. While this yield may seem modest compared to other investment opportunities, it is important to note that Section 8 properties offer stable, government-backed rental income, which can be particularly attractive in a market with uncertain demand.
To summarize, the Section 8 cap rate picture for ZIP 87516, based on the $970 FMR for a two-bedroom unit, suggests an implied gross yield of 4.65% using a hypothetical median home value of $250,000. This figure serves as a reasonable estimate until more specific data becomes available.
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.