Location: Los Angeles-Long Beach-Glendale, CA | Metro: Los Angeles-Long Beach-Glendale, CA HUD Metro FMR Area
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 | $2,180 |
| 1 Bedroom | $2,440 |
| 2 Bedrooms | $3,010 |
| 3 Bedrooms | $3,820 |
| 4 Bedrooms | $4,270 |
| 5 Bedrooms | $4,953 |
| 6 Bedrooms | $5,547 |
| 7 Bedrooms | $5,991 |
| 8 Bedrooms | $6,291 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $3,010 | $760,599 | 0.4% | F |
| 3BR | $3,820 | $895,269 | 0.43% | F |
| 4BR | $4,270 | $1,096,225 | 0.39% | F |
| 5BR | $4,953 | $1,515,084 | 0.33% | F |
U.S. Census Bureau data (2024)
The classification of ZIP 90240 in Downey, CA, hinges on the balance between yield and stability. On the yield axis, the Fair Market Rent (FMR) for 2024 is set at $2,670. This figure contrasts sharply with the market rent of $3,067, indicating a potential for above-average rental yields if properties can be rented out at market rates. The median home value of $947,078 suggests that the area has a relatively high property investment cost, which must be weighed against the rental income potential.
Moving to the stability axis, the ZIP code reveals a mixed picture. With 35.1% of residents being renters, there is a moderate level of demand for rental housing. However, the lack of data on the number of days on market (DOM) indicates some uncertainty regarding the ease of renting out properties. The median household income of $101,904 provides insight into the economic health of the area, suggesting that residents have a reasonable capacity to pay rent, thereby contributing to the stability of rental cash flows.
Given these figures, ZIP 90240 appears to be a zone that offers a blend of yield and stability. It is not a high-yield/low-stability flip-style market due to the relatively high home values and the absence of significant fluctuations in rental demand. At the same time, it does not fit neatly into the category of a steady-cashflow zone because the percentage of renters is not exceptionally high, and the income levels, while solid, do not guarantee a completely stable rental environment.
To conclude, ZIP 90240 is best described as a market that offers opportunities for both yield and stability, but with a slight lean towards stability due to the moderate rental demand and decent income levels. Landlords and small-portfolio investors should consider these factors when evaluating their investment strategies in this area.
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.