Location: Humboldt County, CA | Metro: Humboldt County, CA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,280 |
| 1 Bedroom | $1,350 |
| 2 Bedrooms | $1,770 |
| 3 Bedrooms | $2,450 |
| 4 Bedrooms | $2,960 |
| 5 Bedrooms | $3,434 |
| 6 Bedrooms | $3,846 |
| 7 Bedrooms | $4,154 |
| 8 Bedrooms | $4,362 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 95564 reveals some interesting insights into potential investment opportunities. The Fair Market Rent (FMR) for a two-bedroom apartment in this area, as set by HUD for fiscal year 2026, is $1,630 per month. This translates to an annual rental income of $19,560 for a two-bedroom property under the Section 8 program.
Against this, the market rent for a two-bedroom apartment, based on Census ACS data, stands at $1,523 per month, equating to an annual market rent of $18,276. It's important to note that the median home value in ZIP 95564 is not available, which complicates direct comparisons with other metrics such as gross yield.
Given the 50.3% renter density in ZIP 95564, it suggests a balanced market where both homeowners and renters are present. However, the lack of data on the days-on-market (DOM) makes it challenging to assess the speed at which properties can be leased out. In the absence of specific DOM data, we must rely on the renter density as a key indicator of demand.
The higher gross yield from the Section 8 program could be more attractive to investors looking for stable, long-term rental income. However, the reality of the situation depends on factors such as the ease of securing tenants through the program and the administrative overhead associated with managing Section 8 properties. Despite these considerations, the data clearly shows that the annual rental income under Section 8 is $1,284 more than renting at market rates, making it a potentially more lucrative option for those willing to navigate the program's requirements.
In conclusion, while the market rent scenario offers a realistic view of what non-program properties might fetch, the Section 8 program provides a higher gross yield and stability, which could be beneficial for investors in ZIP 95564. The decision should ultimately be made based on individual investor preferences and the specific dynamics of the local real estate market.
Data Sources: FMR data from HUD (2027). 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.