Location: Merced, CA | Metro: Merced, 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 | $1,320 |
| 1 Bedroom | $1,390 |
| 2 Bedrooms | $1,670 |
| 3 Bedrooms | $2,300 |
| 4 Bedrooms | $2,730 |
| 5 Bedrooms | $3,167 |
| 6 Bedrooms | $3,547 |
| 7 Bedrooms | $3,831 |
| 8 Bedrooms | $4,023 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,670 | $319,875 | 0.52% | F |
| 3BR | $2,300 | $386,238 | 0.6% | F |
| 4BR | $2,730 | $468,908 | 0.58% | F |
| 5BR | $3,167 | $546,340 | 0.58% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 95334, Livingston, CA, reveals a nuanced investment landscape. To begin, let's annualize the Fair Market Rent (FMR) for a 2-bedroom unit at $1440 per month, which translates to an annual rental income of $17,280. Using the median home value of $427,134, the implied gross yield for a Section 8 property would be approximately 4.04%. This calculation is derived by dividing the annual rental income by the median home value.
Next, consider the market rent of $1,412 per month, resulting in an annual rental income of $16,944. The implied gross yield for a market-rent property under these conditions would be about 3.97%. Both figures are calculated based on the assumption that the property is valued at the median home price for the area.
Given the 41.2% renter density in Livingston, CA, it is important to note that the day-on-the-market (DOM) figure is listed as N/A. This suggests that there might be limited data on how quickly properties are rented out in the area, making it difficult to assess the speed at which rental income can be generated. However, the higher renter density indicates a significant portion of the population relies on renting, which could support steady demand for Section 8 housing.
In comparing the two scenarios, the Section 8 FMR scenario offers a slightly higher gross yield (4.04%) compared to the market rent scenario (3.97%). This difference, while modest, can be meaningful for investors seeking stable, government-backed rental income. The FMR scenario is more likely to be realistic for investors considering Section 8 properties, as it is based on the guaranteed payment rates set by HUD. Market rents, however, can fluctuate and do not offer the same level of certainty.
It's worth noting that the actual net operating income (NOI) will depend on various factors including property management costs, maintenance expenses, and vacancy rates. Investors should conduct thorough due diligence to determine the exact NOI for their specific situation. However, the gross-yield comparison provides a clear starting point for understanding potential returns in Livingston, CA.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.