Location: Reno, NV | Metro: Reno, NV HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,280 |
| 1 Bedroom | $1,460 |
| 2 Bedrooms | $1,840 |
| 3 Bedrooms | $2,460 |
| 4 Bedrooms | $2,850 |
| 5 Bedrooms | $3,306 |
| 6 Bedrooms | $3,703 |
| 7 Bedrooms | $3,999 |
| 8 Bedrooms | $4,199 |
The analysis of the Section 8 cap-rate picture for ZIP code 89504 in Nevada reveals some limitations due to incomplete data. However, we can still provide a basic understanding using the available figures.
The Fair Market Rent (FMR) for a 2-bedroom apartment in ZIP 89504 for fiscal year 2024 is set at $1580 per month. Annualizing this figure gives us a yearly rental income of $18,960. This represents the maximum allowable rent for Section 8 tenants under this program.
Unfortunately, the market rent for 2-bedroom apartments in ZIP 89504 is not available, nor is the median home value. Without these figures, it's challenging to calculate an accurate market-based cap rate. However, if we were to assume that the market rent is higher than the FMR, the gross yield for market rents would be greater than that for Section 8 rents. The exact difference cannot be quantified without knowing the market rent figures.
The implied gross yield for a property rented through the Section 8 program can be calculated by dividing the annualized rental income ($18,960) by the median home value. Since the median home value is not available, we cannot provide a precise percentage. But let's consider a hypothetical median home value to illustrate the concept. If the median home value were, for example, $300,000, the implied gross yield would be 6.32%. Again, this calculation is purely illustrative and requires the actual median home value to be meaningful.
Given the lack of data on renter density and days on market (DOM), it's difficult to determine which scenario is more realistic. Typically, higher renter density and lower DOM indicate a more favorable market for rentals, including those under the Section 8 program. However, without specific figures, we can only suggest that investors should look into local real estate trends and consult with local realtors to get a clearer picture.
In conclusion, while the Section 8 program offers a stable source of income with a guaranteed rent of $18,960 annually for a 2-bedroom unit, the absence of key data points such as market rent and median home value makes it impossible to provide a complete cap-rate analysis. Investors must rely on additional research to fill in these gaps and make informed decisions about the potential returns on investment in ZIP 89504.
Data Sources: FMR data from HUD (2027).
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.