Location: Riverside-San Bernardino-Ontario, CA | Metro: Bakersfield-Delano, CA MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,530 |
| 1 Bedroom | $1,600 |
| 2 Bedrooms | $1,990 |
| 3 Bedrooms | $2,630 |
| 4 Bedrooms | $3,170 |
| 5 Bedrooms | $3,677 |
| 6 Bedrooms | $4,118 |
| 7 Bedrooms | $4,447 |
| 8 Bedrooms | $4,669 |
U.S. Census Bureau data (2024)
A decision tree for whether a landlord should buy in ZIP 93516 (Boron, CA) for Section 8 purposes involves three key questions:
1) Does the Fair Market Rent (FMR) of $1580 cover the debt service on a property valued at $170,511?
Yes. The FMR of $1580 can be used to determine if it sufficiently covers the monthly mortgage payment. Assuming a typical 30-year fixed-rate mortgage with an interest rate of around 5%, the monthly mortgage payment for a $170,511 property would be approximately $925. This means that the FMR comfortably exceeds the mortgage payment, allowing for coverage of other expenses such as maintenance, insurance, and property taxes.
No. If the debt service, including all monthly costs beyond just the mortgage, exceeds $1580, then the FMR will not cover these expenses. In this scenario, the landlord would need to consider additional income sources or subsidies to ensure profitability.
It Depends. If the debt service is close to but slightly above $1580, the landlord might still find it feasible by cutting costs or increasing efficiency. However, this requires a detailed financial analysis to confirm.
2) Is the market rent of $1,219 above, at, or below the FMR?
Above. If the market rent were higher than the FMR, landlords could potentially earn more by renting to non-Section 8 tenants. However, since the market rent is actually below the FMR, this is not the case.
At. Not applicable here, as the market rent is lower than the FMR.
Below. With a market rent of $1,219 being below the FMR of $1580, landlords can charge the higher FMR rate for Section 8 tenants, providing a better return compared to market rates.
3) Are 47.7% renters plus the unknown number of days on the market (DOM) enough demand?
Yes. A 47.7% rental rate indicates a significant portion of the housing market is dedicated to renters. Combined with the fact that the FMR is higher than the market rent, this suggests there is sufficient demand for Section 8 properties. Landlords can expect a steady flow of interested tenants.
No. If the rental rate were significantly lower, or if the DOM indicated prolonged vacancy periods, the demand would be insufficient. However, given the high percentage of renters and the lack of data suggesting long DOM times, this scenario does not apply.
It Depends. While the rental rate is strong, the absence of DOM data means that landlords must consider local market conditions and possibly consult real estate agents for insights into vacancy trends before making a final decision.
In conclusion, ZIP 93516 presents a favorable environment for landlords interested in Section 8 investments, with the FMR exceeding debt service costs and being higher than market rents. The high percentage of renters supports a robust demand for rental properties. However, the lack of DOM data necessitates further investigation into local market dynamics.
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.