Location: San Jose-Sunnyvale-Santa Clara, CA | Metro: San Jose-Sunnyvale-Santa Clara, CA HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $2,460 |
| 1 Bedroom | $2,780 |
| 2 Bedrooms | $3,270 |
| 3 Bedrooms | $4,390 |
| 4 Bedrooms | $4,690 |
| 5 Bedrooms | $5,440 |
| 6 Bedrooms | $6,093 |
| 7 Bedrooms | $6,580 |
| 8 Bedrooms | $6,909 |
The analysis for ZIP code 95158 reveals incomplete data, making a precise calculation of the Section 8 cap rate challenging. However, we can still derive some insights based on the available figures.
The Fair Market Rent (FMR) for a two-bedroom apartment in ZIP 95158 for fiscal year 2024 is set at $3130 per month. To annualize this figure, multiply it by 12, resulting in an annual rental income of $37,560. The median home value is not available, nor is the market rent for comparable properties, which hinders a direct comparison between the Section 8 rental income and the market rent.
In terms of gross yield, if we were to assume the median home value could be estimated based on typical yields from similar areas, the gross yield would be calculated by dividing the annual rental income by the median home value. For instance, if the median home value were hypothetically $400,000, the gross yield would be 9.4%. This is a purely illustrative example, as the actual median home value is not provided.
The lack of market rent data means we cannot calculate a comparative gross yield for non-Section 8 units. Without this information, it's impossible to determine how competitive the Section 8 FMR is relative to the local market.
Additionally, the missing renter density percentage and days on market (DOM) data prevent us from assessing the likelihood of finding tenants and the speed at which a property might be rented out. These factors are crucial in determining the feasibility and attractiveness of Section 8 properties in ZIP 95158.
Given the limitations of the provided data, the most concrete conclusion is that the annualized Section 8 FMR of $37,560 offers a stable, government-backed income stream. However, without the median home value and market rent, the exact cap rate and its competitiveness remain unclear. Landlords and small-portfolio investors should seek additional 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.