Location: Stockton-Lodi, CA | Metro: Stockton-Lodi, CA MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,530 |
| 1 Bedroom | $1,630 |
| 2 Bedrooms | $2,020 |
| 3 Bedrooms | $2,800 |
| 4 Bedrooms | $3,380 |
| 5 Bedrooms | $3,921 |
| 6 Bedrooms | $4,392 |
| 7 Bedrooms | $4,743 |
| 8 Bedrooms | $4,980 |
The analysis of the Section 8 cap rate for ZIP code 95234 reveals a challenging scenario due to limited data availability. The Fair Market Rent (FMR) for a two-bedroom apartment in fiscal year 2024 is set at $1750 per month. To annualize this figure, we multiply it by 12, yielding an annual rental income of $21,000.
The median home value in ZIP 95234 is not available, which complicates the calculation of the gross yield. However, assuming a median home value for illustrative purposes, let's consider a hypothetical median home value of $400,000 (this figure is not based on actual data for ZIP 95234). The gross yield would be calculated by dividing the annual rental income by the property value, resulting in a gross yield of 5.25% ($21,000 / $400,000).
Market rent data for ZIP 95234 is also not available, making it difficult to compare the Section 8 rental income against market rates. In a typical scenario where market rents are higher, the gross yield would likely be lower when using Section 8 rates. For example, if the market rent were hypothetically $2,200 per month (again, this is illustrative), the annualized market rent would be $26,400, leading to a gross yield of 6.6% ($26,400 / $400,000).
Given the N/A% renter density and the N/A-day Days on Market (DOM), it is unclear how frequently properties are rented out or how long they remain vacant. This lack of information makes it difficult to determine which scenario is more realistic. However, it is generally understood that areas with higher renter density and shorter DOM periods tend to favor higher market rents, which could suggest that the market rent scenario might be more plausible if the area has a high demand for rentals.
In conclusion, while the Section 8 program provides a stable income source, the gross yield at $1750 monthly rental rates is lower compared to a hypothetical market rate. Investors should consider these factors alongside other local real estate dynamics before making decisions. The precise figures depend on accurate property values and market rents, which are currently unavailable for ZIP 95234.
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.