Location: Oakland-Fremont, CA | Metro: Oakland-Fremont, 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 | $1,930 |
| 1 Bedroom | $2,150 |
| 2 Bedrooms | $2,630 |
| 3 Bedrooms | $3,360 |
| 4 Bedrooms | $3,980 |
| 5 Bedrooms | $4,617 |
| 6 Bedrooms | $5,171 |
| 7 Bedrooms | $5,585 |
| 8 Bedrooms | $5,864 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,150 | $386,323 | 0.56% | F |
| 2BR | $2,630 | $452,471 | 0.58% | F |
| 3BR | $3,360 | $528,453 | 0.64% | D |
| 4BR | $3,980 | $615,160 | 0.65% | D |
| 5BR | $4,617 | $660,192 | 0.7% | D |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 94801 in Richmond, California, provides a critical view into the potential returns for landlords and small-portfolio investors. Using the Fair Market Rent (FMR) for a 2-bedroom unit at $2170 per month, the annualized rental income comes to $26,040. Against the median home value of $515,847, this translates to an implied gross yield of approximately 5.05%. The calculation is straightforward: divide the annual rental income by the property's value.
In contrast, the market rent for a similar unit, as indicated by Zillow's ZORI, stands at $2,298 per month. This yields an annual rental income of $27,576, resulting in a gross yield of about 5.34%. Both figures are derived directly from the provided data points, offering a precise snapshot of the rental landscape in Richmond.
The higher gross yield based on market rent suggests a more favorable scenario for landlords seeking to maximize returns. However, the reality of Section 8 participation involves a different set of considerations. With a renter density of 51.5%, the demand for rental properties, including those under Section 8, is robust. This high density implies that finding tenants willing to pay the market rate should be relatively easy, making the higher gross yield more attainable.
The N/A-day DOM (Days on Market) indicates that properties in Richmond are typically sold quickly, suggesting a strong local real estate market. While this doesn't directly impact the cap rate, it does imply that there is a steady interest in the area, which can support higher rents and, consequently, better gross yields.
Given these factors, while the Section 8 FMR offers a conservative baseline, the market rent reflects a more realistic scenario for achieving higher gross yields. Investors should consider the broader context of Richmond's real estate market when evaluating the potential returns of their investments.
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.