Location: Los Angeles-Long Beach-Glendale, CA | Metro: Los Angeles-Long Beach-Glendale, CA HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $2,150 |
| 1 Bedroom | $2,400 |
| 2 Bedrooms | $2,960 |
| 3 Bedrooms | $3,760 |
| 4 Bedrooms | $4,200 |
| 5 Bedrooms | $4,872 |
| 6 Bedrooms | $5,457 |
| 7 Bedrooms | $5,894 |
| 8 Bedrooms | $6,189 |
The Section 8 thesis in ZIP code 90662, located in Unknown, CA, is centered around the disparity between the Fair Market Rent (FMR) and the actual market rent. The FMR for ZIP 90662 for fiscal year 2024 is set at $2540. However, the market rent data is currently unavailable, which complicates the direct comparison. Despite this, it's crucial to understand the implications of the FMR being higher than the typical market rent.
When the FMR exceeds the market rent, landlords can leverage Section 8 vouchers to attract tenants who might otherwise struggle to find affordable housing. This scenario transforms the ZIP into a yield play, where landlords can secure steady rental income without the risk of vacancy. Voucher tenants provide a guaranteed source of income, as the government covers the majority of the rent, ensuring that landlords receive the FMR amount, which is $2540 in this case.
The absence of specific market rent figures makes it challenging to quantify the exact gap in dollars and percentage. Nevertheless, the principle remains that if the market rent is lower than $2540, landlords stand to benefit from the higher FMR rate. This advantage is particularly significant in an area where the median home value and median income are also unspecified, suggesting a potentially diverse economic landscape. Without concrete data on these metrics, landlords should focus on the reliability of Section 8 payments and the stability they offer in terms of occupancy and cash flow.
In conclusion, while the precise gap between the FMR and market rent cannot be stated due to incomplete data, the potential for a yield play exists when the FMR is higher than what the market typically offers. Landlords in ZIP 90662 can capitalize on this by accepting Section 8 vouchers, thereby securing a stable income stream at the FMR rate of $2540 per month. This approach is especially valuable in areas with uncertain economic indicators, as it provides a predictable revenue model regardless of broader market fluctuations.
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.