Location: Modesto, CA | Metro: Modesto, CA MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,270 |
| 1 Bedroom | $1,380 |
| 2 Bedrooms | $1,800 |
| 3 Bedrooms | $2,410 |
| 4 Bedrooms | $2,820 |
| 5 Bedrooms | $3,271 |
| 6 Bedrooms | $3,664 |
| 7 Bedrooms | $3,957 |
| 8 Bedrooms | $4,155 |
The analysis for ZIP code 95353 in California reveals some limitations due to missing data points, particularly concerning median home values and specific market rents. However, we can still provide an overview based on the available information.
The Fair Market Rent (FMR) for a two-bedroom apartment in ZIP 95353 for fiscal year 2024 is set at $1530 per month. This figure represents the annualized rental income potential for properties participating in the Section 8 program. To calculate the gross yield, we would typically divide this annual rental income by the median home value. Unfortunately, the median home value for this ZIP code is not available, making it impossible to compute an exact gross yield. However, assuming a hypothetical median home value, we could estimate the gross yield. For instance, if the median home value were $306,000, the gross yield would be approximately 6% ($1530 * 12 / $306,000).
Without a specific market rent figure, we cannot compare the Section 8 FMR to typical market rates. The lack of this data point prevents us from assessing how competitive the Section 8 rate is relative to what landlords might receive from private renters. If market rents were higher, say $1800 per month, the implied gross yield under market conditions would be lower when compared to the same median home value scenario, illustrating the trade-off between guaranteed rental income and potentially higher market rates.
The renter density percentage and days on market (DOM) are also not provided, which are critical factors in determining the overall attractiveness of renting in this area. A high renter density percentage and low DOM suggest a strong demand for rentals, which could influence the decision to participate in Section 8 versus seeking private tenants.
In conclusion, while the exact gross yield cannot be determined without the median home value, the Section 8 FMR provides a stable and predictable rental income. Investors should consider local market dynamics, including the competition from private rentals and the reliability of tenant payments through the Section 8 program, before making investment decisions. The absence of specific market rent figures makes it challenging to assess the comparative advantage of either option definitively.
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.