Location: Santa Fe, NM | Metro: Santa Fe, NM MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,140 |
| 1 Bedroom | $1,260 |
| 2 Bedrooms | $1,520 |
| 3 Bedrooms | $1,910 |
| 4 Bedrooms | $2,010 |
| 5 Bedrooms | $2,332 |
| 6 Bedrooms | $2,612 |
| 7 Bedrooms | $2,821 |
| 8 Bedrooms | $2,962 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 87567 reveals interesting insights into the potential returns for landlords and small-portfolio investors. Based on the provided data, the Fair Market Rent (FMR) for a 2-bedroom unit in fiscal year 2024 is set at $1130. This figure represents the annualized rental income that can be expected under the Section 8 program. In contrast, the market rent for a similar unit, according to the Census ACS data, stands at $1,138 per month.
To derive the gross yield, we first calculate the annualized rental income for both scenarios. For the Section 8 scenario, multiplying the monthly FMR by 12 gives us an annual rental income of $13,560. Dividing this by the median home value of $328,785 yields a gross yield of approximately 4.13%. On the other hand, using the market rent of $1,138, the annual rental income would be $13,656, resulting in a slightly higher gross yield of about 4.15% when compared to the median home value.
The difference between these two gross yields is minimal, at just over 0.02 percentage points. However, considering the 16.7% renter density in ZIP 87567, the market rent scenario appears more realistic. The lower renter density suggests that a significant portion of the housing stock is occupied by homeowners, making it less likely that a property will be continuously rented out at the Section 8 rate. Additionally, the N/A-day DOM (Days on Market) indicates either a very quick turnover or a lack of comprehensive data, which could mean that properties are typically leased quickly once they become available.
In summary, while the gross yields for both the Section 8 and market rent scenarios are nearly identical, the market rent scenario provides a more practical outlook for investors due to the relatively low renter density and potentially fast property turnovers. Landlords should consider these factors when evaluating the potential returns of properties in ZIP 87567.
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.