Section 8 Fair Market Rent (FMR) for ZIP 93777 - 2027

FY 2027 Fair Market Rent Rates

The analysis of the Section 8 cap-rate scenario for ZIP code 93777 reveals critical insights into the potential returns for landlords and small-portfolio investors. With an annualized Fair Market Rent (FMR) for a 2-bedroom apartment set at $1440 for fiscal year 2024, we can derive the implied gross yield under two different scenarios: one using the Section 8 FMR and another using the market rent, which is currently not available.

In the first scenario, using the Section 8 FMR of $1440 per year for a 2-bedroom unit, the gross yield calculation is contingent upon the median home value in the area, which is also not provided. However, assuming a median home value, the gross yield would be calculated by dividing the annual rental income by the property's value. For instance, if the median home value were hypothetically $300,000, the gross yield would be approximately 0.48%. This figure is derived by multiplying the monthly FMR ($120) by 12 months to get the annual rental income ($1440), then dividing that by the assumed median home value ($300,000).

The second scenario, which involves market rent, cannot be quantified due to the lack of specific data. The absence of market rent figures makes it impossible to calculate a precise gross yield. However, typically, market rents exceed Section 8 FMRs, leading to higher gross yields. Given the unknown median home value and the unavailability of market rent data, a direct comparison between the two yields is challenging.

Regarding the N/A% renter density and N/A-day Days on Market (DOM), these metrics indicate a need for further research to understand the local rental market dynamics. Renter density informs about the proportion of renters in the area, while DOM reflects how quickly properties are rented out. Both factors influence the feasibility and speed of tenant acquisition for Section 8 properties.

While the hypothetical Section 8 gross yield of 0.48% provides a baseline, it is important to note that this scenario assumes a median home value of $300,000, which is speculative. In reality, the gross yield based on actual market conditions could be significantly different. Landlords should consider conducting a thorough analysis of local market rents and property values to determine a more accurate gross yield and cap rate.

To conclude, the implied gross yield based on the Section 8 FMR for ZIP 93777 is low compared to typical market yields, but without specific market rent data, this comparison remains abstract. Investors should focus on acquiring detailed local market data to make informed decisions.

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.