Location: Las Cruces, NM | Metro: Las Cruces, NM MSA
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $750 |
| 1 Bedroom | $920 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,390 |
| 4 Bedrooms | $1,610 |
| 5 Bedrooms | $1,868 |
| 6 Bedrooms | $2,092 |
| 7 Bedrooms | $2,259 |
| 8 Bedrooms | $2,372 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,010 | $290,868 | 0.35% | F |
| 3BR | $1,390 | $311,951 | 0.45% | F |
| 4BR | $1,610 | $385,030 | 0.42% | F |
| 5BR | $1,868 | $535,052 | 0.35% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP 88007 in Las Cruces, NM, provides insight into potential investment returns. Using the annualized Fair Market Rent (FMR) for a 2BR unit at $910 per month, the annual income comes to $10,920. Against the median home value of $325,857, this translates to an implied gross yield of approximately 3.35%. This calculation is based on the FMR, which is set by HUD and represents the maximum amount that can be charged for a Section 8 voucher.
On the other hand, using the market rent figure of $894 per month (as reported by the Census ACS), the annual income drops slightly to $10,728. The implied gross yield in this scenario is about 3.29%, still providing a reasonable return on investment.
The difference between these two yields is minimal, suggesting that either figure can be used for a conservative estimate. However, considering the 18.5% renter density and the fact that the days-on-market (DOM) data is not available, it's important to note that the market rent scenario is more likely to reflect the actual rental environment in ZIP 88007. Renter density indicates a lower proportion of renters compared to homeowners, which could imply a tighter rental market and potentially higher competition for Section 8 vouchers.
Despite the slight edge in yield provided by the FMR, the market rent scenario is more realistic due to the inherent variability in rental markets. Landlords should be prepared to adjust their expectations based on local market conditions and the specific terms of Section 8 contracts. A gross yield around 3.29% aligns better with the current rental dynamics in Las Cruces, ensuring a sustainable income stream for investors.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.