Location: Modesto, 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 | $1,130 |
| 1 Bedroom | $1,230 |
| 2 Bedrooms | $1,590 |
| 3 Bedrooms | $2,200 |
| 4 Bedrooms | $2,550 |
| 5 Bedrooms | $2,958 |
| 6 Bedrooms | $3,313 |
| 7 Bedrooms | $3,578 |
| 8 Bedrooms | $3,757 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,590 | $342,185 | 0.46% | F |
| 3BR | $2,200 | $410,754 | 0.54% | F |
| 4BR | $2,550 | $477,591 | 0.53% | F |
| 5BR | $2,958 | $553,490 | 0.53% | F |
U.S. Census Bureau data (2024)
The investment landscape for Section 8 properties in ZIP code 95360, located in Newman, CA, presents several potential pitfalls that landlords must consider. Firstly, tenant turnover poses a significant challenge due to the disparity between the market rent of $1,424 and the Fair Market Rent (FMR) set at $1,360 for fiscal year 2024. This discrepancy can lead to frequent changes in occupancy, which disrupts rental income stability and increases administrative costs associated with screening new tenants.
Vacancy exposure is another critical concern. With an average Days on Market (DOM) being unavailable, it's difficult to gauge how quickly units will fill up once vacated. In a market where rental rates are higher than the FMR, landlords might face prolonged vacancies if they do not adjust their rents accordingly.
Deferred maintenance is also a risk factor. The typical home value in the area stands at $439,053, while the median household income is only $79,213. This suggests that residents may struggle to afford necessary repairs and maintenance, leading to potential property deterioration over time. Landlords should be prepared to invest in regular upkeep to ensure compliance with housing standards and maintain property value.
Despite these challenges, the high renter share of 36.8% indicates a robust demand for rental properties, including those that accept Section 8 vouchers. This dense concentration of renters often translates into a steady flow of voucher holders seeking accommodation, thereby reducing the overall risk of vacancy.
In conclusion, the investment risk for a first-time Section 8 landlord in ZIP 95360 is moderate.
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.