Location: Las Cruces, NM | Metro: Las Cruces, NM MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $790 |
| 1 Bedroom | $970 |
| 2 Bedrooms | $1,070 |
| 3 Bedrooms | $1,460 |
| 4 Bedrooms | $1,690 |
| 5 Bedrooms | $1,960 |
| 6 Bedrooms | $2,195 |
| 7 Bedrooms | $2,371 |
| 8 Bedrooms | $2,490 |
U.S. Census Bureau data (2024)
The analysis for ZIP code 87941 reveals key insights into the potential returns for landlords and small-portfolio investors considering Section 8 properties. The Fair Market Rent (FMR) for a 2-bedroom apartment in this area for FY 2024 is set at $880 per month. To derive the gross yield based on this figure, we annualize the rent, resulting in $10,560 annually. Given the median home value of $182,636, the implied gross yield when using the FMR would be approximately 5.78%. This calculation provides a baseline understanding of the rental income potential relative to property value.
However, it's important to note that the market rent for 2-bedroom apartments in ZIP 87941 is currently not available. In the absence of market rent data, the gross yield cannot be calculated for this scenario. Typically, market rents can provide a higher gross yield compared to FMR rates, but without specific figures, such comparisons remain speculative.
Considering the renter density of 22.0% in ZIP 87941, it suggests a moderate demand for rental properties. A lower Days on Market (DOM) indicates quicker property turnover, which could be beneficial for landlords. However, since the DOM data is not available, we must rely on other indicators such as renter density to gauge market activity.
In conclusion, while the Section 8 scenario offers a clear and calculable gross yield of around 5.78%, the lack of market rent data makes it difficult to compare the two scenarios directly. The FMR-based gross yield is a conservative estimate, suitable for risk-averse investors. For those willing to explore market rents, the potential for higher yields exists, though it requires further investigation into local rental trends.
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.