Location: Las Cruces, NM | Metro: Las Cruces, NM MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $820 |
| 1 Bedroom | $1,010 |
| 2 Bedrooms | $1,110 |
| 3 Bedrooms | $1,510 |
| 4 Bedrooms | $1,750 |
| 5 Bedrooms | $2,030 |
| 6 Bedrooms | $2,274 |
| 7 Bedrooms | $2,456 |
| 8 Bedrooms | $2,579 |
U.S. Census Bureau data (2024)
The analysis for ZIP code 87940 reveals an interesting dynamic between the federally mandated Fair Market Rent (FMR) and the potential market rent for two-bedroom properties. The FMR for a 2BR property in this area for FY 2024 is set at $980 per month. When annualized, this figure translates into a monthly rent revenue of $11,760 annually.
To calculate the gross yield based on the FMR, we take the annual rent revenue and divide it by the median home value. With a median home value of $267,747, the implied gross yield under the FMR scenario is approximately 4.4%. This calculation is straightforward and provides a benchmark for the minimum rental income that can be expected if a property participates in the Section 8 program.
In contrast, the market rent for 2BR properties in ZIP 87940 is currently not available. However, it's important to note that the lack of market rent data does not necessarily imply that the FMR represents the market rate. In many cases, the actual market rent can be significantly higher than the FMR, potentially leading to a much better gross yield.
The renter density in ZIP 87940 stands at 32.2%, indicating a moderate level of rental activity in the area. The Days on Market (DOM) statistic is also not available, which could be a critical factor in assessing the speed at which properties are leased. A lower DOM would suggest a faster turnover and potentially less vacancy risk, which could improve the overall yield.
Given the data, the FMR-based gross yield of 4.4% appears to be a conservative estimate. For landlords and small-portfolio investors, relying solely on FMR might not fully capture the potential rental income in a competitive market. If market rents were known and higher than the FMR, the gross yield would likely exceed 4.4%, making investment more attractive. Until market rent data becomes available, the 4.4% gross yield based on FMR should be considered a baseline for investment decisions in ZIP 87940.
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.