Location: Salinas, CA | Metro: Salinas, CA MSA
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $2,340 |
| 1 Bedroom | $2,410 |
| 2 Bedrooms | $2,890 |
| 3 Bedrooms | $3,890 |
| 4 Bedrooms | $4,240 |
| 5 Bedrooms | $4,918 |
| 6 Bedrooms | $5,508 |
| 7 Bedrooms | $5,949 |
| 8 Bedrooms | $6,246 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,410 | $566,776 | 0.43% | F |
| 2BR | $2,890 | $886,945 | 0.33% | F |
| 3BR | $3,890 | $1,228,709 | 0.32% | F |
| 4BR | $4,240 | $1,697,682 | 0.25% | F |
| 5BR | $4,918 | $2,278,329 | 0.22% | F |
U.S. Census Bureau data (2024)
The classification of ZIP 93940 (Monterey, CA) on the axes of yield and stability reveals it as a steady-cashflow zone. This determination is driven by the following figures:
Firstly, the yield analysis indicates that the Fair Market Rent (FMR) for the fiscal year 2024 is set at $3500. This figure is notably higher than the current market rent of $2800, suggesting that properties in this area can potentially command higher rental rates. However, the median home value of $1,135,796 is relatively high, which means that the capital investment required to enter this market is substantial. The higher FMR compared to the market rent provides a positive outlook for rental income, but the significant cost of entry tempers the overall yield potential.
Secondly, the stability metrics paint a picture of a market that is consistent and reliable. With 58.7% of residents being renters, there is a strong demand for rental properties. The days on market (DOM) average of 45 days suggests that properties are typically occupied quickly once they become available, indicating a robust rental market. Additionally, the median household income of $106,044 supports the ability of tenants to afford higher rents, further enhancing the stability of the rental cash flow.
Given these factors, ZIP 93940 does not fit the profile of a high-yield/low-stability flip-style market. Instead, it aligns more closely with a steady-cashflow zone due to the high percentage of renters, quick property turnover, and the ability of tenants to pay higher rents without jeopardizing their financial stability. The combination of these elements ensures a predictable and sustainable rental income for landlords and small-portfolio investors.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.