Location: Otero County, NM | Metro: Otero County, NM
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 | $710 |
| 1 Bedroom | $880 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,410 |
| 4 Bedrooms | $1,700 |
| 5 Bedrooms | $1,972 |
| 6 Bedrooms | $2,209 |
| 7 Bedrooms | $2,386 |
| 8 Bedrooms | $2,505 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,010 | $149,673 | 0.67% | D |
| 3BR | $1,410 | $193,670 | 0.73% | D |
| 4BR | $1,700 | $284,423 | 0.6% | F |
U.S. Census Bureau data (2024)
To decide whether you should buy in ZIP 88352 (Tularosa, NM) for Section 8 investment, follow these steps:
Step 1: Determine if the Fair Market Rent (FMR) of $970 per month can cover the debt service on a property valued at $185,071. This requires calculating the monthly mortgage payment based on typical interest rates and loan terms. For instance, with a 30-year fixed-rate mortgage at 4.5%, the monthly principal and interest payment would be approximately $921. Adding property taxes and insurance, let's assume an additional $200, making the total debt service around $1,121 per month. Since the FMR of $970 does not exceed this amount, the answer to this question is No. The FMR is insufficient to clear the debt service.
If the FMR does not cover debt service, stop here. It is not advisable to invest in this area for Section 8 purposes. However, for completeness, we will address the remaining questions.
Step 2: Compare the market rent of $938 (from Census ACS data) to the FMR of $970. In this case, the market rent is below the FMR. This suggests that landlords could potentially charge the higher FMR rate for Section 8 tenants without being out of line with local rental prices. But given the previous step's negative outcome, this point is less critical.
Step 3: Assess the rental demand. In Tularosa, 16.8% of residents are renters, but the Days on Market (DOM) data is not available. This makes it difficult to determine how quickly rental units are typically filled. Without this information, the demand cannot be fully evaluated. Therefore, the answer to this question is It Depends. While there is a known percentage of renters, the lack of DOM data means that it is unclear whether the demand is robust enough to support quick turnover of rental units.
In summary, for ZIP 88352 (Tularosa, NM), the decision to buy for Section 8 investment is No based on the first question alone. The FMR of $970 is not sufficient to cover the debt service on a property priced at $185,071. Even though the market rent is below the FMR, which might suggest a potential to charge higher rents for Section 8 tenants, the primary financial viability criterion is not met. Additionally, the rental demand assessment is incomplete due to missing DOM data.
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.