Location: San Francisco, CA | Metro: San Francisco, CA HUD Metro FMR Area
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 | $2,940 |
| 1 Bedroom | $3,520 |
| 2 Bedrooms | $4,260 |
| 3 Bedrooms | $5,440 |
| 4 Bedrooms | $5,780 |
| 5 Bedrooms | $6,705 |
| 6 Bedrooms | $7,510 |
| 7 Bedrooms | $8,111 |
| 8 Bedrooms | $8,517 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $3,520 | $800,148 | 0.44% | F |
| 2BR | $4,260 | $1,508,799 | 0.28% | F |
| 3BR | $5,440 | $2,994,847 | 0.18% | F |
U.S. Census Bureau data (2024)
Investing in Section 8 properties in ZIP code 94105, located in San Francisco, CA, presents several potential pitfalls that new landlords must be aware of. First, tenant turnover can be a significant issue. The market rent for properties in this area is $5,011, while the Fair Market Rent (FMR) for FY 2024 is set at $4,500. This discrepancy can lead to frequent changes in occupancy as tenants seek the higher subsidy offered by the Section 8 program. High turnover rates can strain property management resources and increase costs associated with leasing and maintenance.
Vacancy exposure is another critical risk factor. Unfortunately, the Days on Market (DOM) data for ZIP 94105 is not available, which makes it challenging to predict how long a unit might remain vacant between tenancies. However, the typical home value in this area is $1,064,833, indicating a robust housing market. Yet, the median income of $225,000 suggests that many residents may struggle to afford the market rent without assistance, potentially leading to prolonged vacancies if a suitable tenant cannot be found quickly.
The risk of deferred maintenance is also noteworthy. With a typical home value significantly higher than the median income, landlords must be prepared for the possibility that tenants may not prioritize upkeep, leading to necessary repairs and renovations that could impact profitability. The cost of these improvements can quickly add up, especially in a high-value market like San Francisco.
Despite these challenges, the high renter share of 65.2% in ZIP 94105 indicates a strong demand for rental properties, including those that accept Section 8 vouchers. This high concentration of renters typically translates into a steady pool of potential tenants, reducing the likelihood of extended vacancies once a property is listed under the program. Moreover, the competition among renters for affordable housing can help mitigate some of the risks associated with tenant selection and turnover.
Verdict: Moderate risk for a first-time Section 8 landlord.
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.