Location: Mendocino County, CA | Metro: Santa Rosa-Petaluma, 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 | $1,760 |
| 1 Bedroom | $1,940 |
| 2 Bedrooms | $2,550 |
| 3 Bedrooms | $3,500 |
| 4 Bedrooms | $3,740 |
| 5 Bedrooms | $4,338 |
| 6 Bedrooms | $4,859 |
| 7 Bedrooms | $5,248 |
| 8 Bedrooms | $5,510 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,940 | $492,045 | 0.39% | F |
| 2BR | $2,550 | $578,098 | 0.44% | F |
| 3BR | $3,500 | $619,534 | 0.56% | F |
| 4BR | $3,740 | $733,036 | 0.51% | F |
| 5BR | $4,338 | $841,611 | 0.52% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate picture for ZIP 95425, Cloverdale, CA, can be analyzed using the Fair Market Rent (FMR) and market rent figures provided. The annualized 2BR FMR for FY 2024 is $2030 per month, while the Census ACS reports a market rent of $1424 per month. Using these figures against the median home value of $635,825, we can calculate the implied gross yields.
First, let's consider the scenario based on the FMR. At $2030 per month, the annual rental income would be $24,360. Dividing this by the median home value gives us an implied gross yield of approximately 3.83%. This calculation assumes that the property could be rented out at the FMR rate year-round, which may not always be the case due to various factors such as vacancy rates and tenant turnover.
Next, we look at the market rent scenario. With a monthly rent of $1424, the annual rental income would be $17,088. When divided by the median home value, this results in an implied gross yield of about 2.69%. This figure represents the actual market conditions as reported by the Census ACS and is likely to be more reflective of what landlords might expect in terms of rental income.
Given the 27.6% renter density in ZIP 95425, it's important to note that the majority of residents are homeowners rather than renters. This suggests that the market rent scenario is more realistic, as it aligns with the local housing market dynamics where a significant portion of the population owns homes. Additionally, the N/A-day DOM (days on market) indicates that there is no specific data available regarding how long properties typically stay on the market before being rented, which could imply stable demand but also highlights the need for further local market analysis.
In conclusion, while the FMR-based gross yield of 3.83% offers a higher return, the market rent-based gross yield of 2.69% provides a more accurate representation of the rental income potential in Cloverdale, CA. Landlords and small-portfolio investors should focus on the market rent scenario when evaluating investment opportunities in this area, as it reflects the true economic landscape and renter behavior.
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.