Location: Lea County, NM | Metro: Lea County, NM
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,130 |
| 1 Bedroom | $1,140 |
| 2 Bedrooms | $1,350 |
| 3 Bedrooms | $1,700 |
| 4 Bedrooms | $1,850 |
| 5 Bedrooms | $2,146 |
| 6 Bedrooms | $2,404 |
| 7 Bedrooms | $2,596 |
| 8 Bedrooms | $2,726 |
U.S. Census Bureau data (2024)
The classification of ZIP code 88231 hinges on analyzing its yield potential and stability metrics. Yield is determined by comparing the Fair Market Rent (FMR) for the metro area in fiscal year 2026, which stands at $1,410, against the local market rent of $721. Additionally, the median home value of $142,407 plays a role in assessing the overall profitability.
On the stability axis, we consider the percentage of renters at 26.3%, the lack of data on days on market (DOM), and the average household income of $51,417. These factors help gauge the reliability of cash flow and the risk associated with the rental market.
Analyzing the yield, ZIP 88231 presents an opportunity for higher-than-average returns. The FMR exceeds the market rent by $689, indicating that properties in this ZIP could be rented above the market rate, thus increasing the potential yield. However, the median home value is relatively low compared to the FMR, suggesting that the cost basis for acquiring property is also lower, which can enhance the overall return on investment (ROI).
In terms of stability, the percentage of renters is moderate, but the absence of DOM data introduces uncertainty regarding how quickly properties can be leased. The average income figure, while not exceptionally high, does provide a reasonable level of assurance that tenants can afford the higher rents suggested by the FMR. This balance leans towards a steady-cashflow zone rather than a high-risk, high-reward scenario.
Based on these figures, ZIP 88231 is best classified as a steady-cashflow zone. The significant gap between FMR and market rent suggests strong potential for above-average yields, while the moderate renter percentage and reasonable income levels imply a stable tenant base capable of sustaining these rents. The low median home value further supports this classification, as it allows for a higher ROI even with the current market conditions.
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.