Section 8 Fair Market Rent (FMR) for ZIP 89825 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

The analysis of the Section 8 cap rate for ZIP code 89825 reveals a challenging investment scenario due to the absence of median home value data, which is crucial for calculating precise cap rates. However, we can still derive a rough picture based on the available figures.

The Fair Market Rent (FMR) for a two-bedroom apartment in ZIP 89825 for fiscal year 2026 is set at $1,300 annually. This translates into a monthly rental assistance payment of approximately $108.33. If we consider the annualized Section 8 rent, it amounts to $1,300 per unit. For comparison, the market rent for a similar property, as reported by the Census ACS, stands at $725 annually, or about $60.42 per month.

• Section 8 Gross-Yield Scenario: With an annualized Section 8 rent of $1,300, the gross yield would be significantly lower if compared against typical home values in the area, assuming such values were available. The lack of median home value data makes it impossible to provide a concrete cap rate figure, but the gross yield would be calculated as the annual rent divided by the property's purchase price.
• Market Rent Gross-Yield Scenario: Similarly, using the market rent figure of $725 annually, the gross yield would also be calculated as the annual rent divided by the purchase price. Again, without the median home value, this calculation cannot be completed, but it serves as a benchmark for comparing potential returns.

Given the 64.8% renter density in ZIP 89825, the market appears to favor rental properties over owner-occupied homes. However, the absence of days-on-market (DOM) data complicates the assessment of how quickly properties can be rented out under either program. The implied gross-yield for both scenarios suggests that the Section 8 program offers a higher annual rental income ($1,300 vs. $725), but this does not account for the additional administrative burdens and restrictions associated with the Section 8 program.

In conclusion, while the Section 8 program provides a higher monthly rental amount, the market rent scenario offers a more straightforward investment approach. Landlords and small-portfolio investors should weigh the benefits of higher rental income against the potential complexities and time required to manage Section 8 properties. The choice between the two depends largely on the investor's risk tolerance and management capabilities.

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.