Location: El Centro, CA | Metro: El Centro, CA MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $850 |
| 1 Bedroom | $940 |
| 2 Bedrooms | $1,230 |
| 3 Bedrooms | $1,670 |
| 4 Bedrooms | $2,060 |
| 5 Bedrooms | $2,390 |
| 6 Bedrooms | $2,677 |
| 7 Bedrooms | $2,891 |
| 8 Bedrooms | $3,036 |
The Section 8 cap rate analysis for ZIP code 92222 reveals a challenging investment landscape due to limited data points. The Fair Market Rent (FMR) for a 2-bedroom unit in fiscal year 2024 is set at $1050 per month. To annualize this figure, we multiply by 12, yielding an annual rental income of $12,600. Given that the median home value is not available, we cannot calculate the exact gross yield. However, we can infer that if the median home value were, say, $300,000, the gross yield would be approximately 4.2%, calculated as $12,600 divided by $300,000.
In the absence of specific market rent data, it's difficult to provide a direct comparison. If market rents were higher, the gross yield would naturally increase. For example, if the market rent for a similar property was $1500 per month, the annualized market rent would be $18,000, leading to a gross yield of 6% assuming the same median home value of $300,000. This scenario suggests a more favorable investment opportunity compared to the Section 8 FMR.
The implied gross yield based on the FMR of $1050 per month is therefore lower than what could potentially be achieved with market rents, should they be higher. However, the decision to pursue a Section 8 property must also consider the stability of rental income, as Section 8 contracts are federally subsidized and offer consistent payments. Additionally, the lack of data on renter density and days on market (DOM) means we cannot accurately assess the demand for rental properties in this area. Investors should gather more localized data to understand the potential occupancy rates and competition levels.
In conclusion, while the exact figures are not available, the analysis indicates that properties under Section 8 in ZIP 92222 would have a lower gross yield compared to those rented at market rates. The choice between these options depends on the investor's preference for stable income versus higher potential returns. Further investigation into local rental market conditions and the specifics of Section 8 participation in this ZIP code is recommended.
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.