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 analysis of the Section 8 cap rate for ZIP code 91609 (Unknown, CA) requires an understanding of the Fair Market Rent (FMR) and market rent dynamics compared to the median home value. For FY 2024, the annualized FMR for a two-bedroom apartment in this ZIP code is set at $2540. However, the median home value is currently unavailable, as are specific market rent figures and renter density percentages.
To calculate the implied gross yield, we need to consider the FMR as a proxy for rental income. Assuming a property's value is known, the gross yield can be derived by dividing the annual rental income by the property's value. In this case, without a specific median home value, we cannot provide an exact gross yield figure. Nevertheless, if we hypothetically assume a median home value, we could compare the Section 8 FMR-based gross yield to that of market rents.
Given the lack of market rent data, it is challenging to determine which scenario is more realistic. The days on market (DOM) information is also unavailable, which would typically help gauge the competitiveness of rental rates. If the DOM were available, a lower number might suggest that market rents are higher and more competitive than the FMR.
Without precise data on median home values and market rents, it's important to note that the Section 8 program provides a guaranteed source of income, albeit at a fixed rate. This predictability can be attractive to landlords and small-portfolio investors, especially in areas where vacancy rates are high or economic uncertainty prevails. Conversely, relying on market rents can offer potentially higher returns but comes with greater risk and volatility.
In conclusion, while the exact gross yield cannot be calculated due to missing data, the choice between Section 8 and market rents should be based on individual investment goals, risk tolerance, and the broader housing market conditions in ZIP 91609.
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.