Location: Yolo, CA | Metro: Yolo, CA HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,450 |
| 1 Bedroom | $1,460 |
| 2 Bedrooms | $1,900 |
| 3 Bedrooms | $2,630 |
| 4 Bedrooms | $2,870 |
| 5 Bedrooms | $3,329 |
| 6 Bedrooms | $3,728 |
| 7 Bedrooms | $4,026 |
| 8 Bedrooms | $4,227 |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP 95607 is anchored by the gap between the HUD Fair Market Rent (FMR) of $1980 and the average market rent of $1719. This represents a difference of $261, or approximately 15.2%, indicating that FMR exceeds the market rent.
Voucher tenants can make this a yield play for landlords and small-portfolio investors. With FMR higher than the market rent, properties can attract Section 8 tenants without significantly reducing their rental income. The median home value in 95607 is $748,060, and the median income is $149,236. However, only 21.1% of residents are renters, suggesting a smaller pool of potential voucher tenants compared to areas with higher rental populations.
The cap rate in 95607 is estimated at 1.8%, which is low. This indicates that the potential for cash flow is limited, especially given the current 30-year mortgage rate of 6.3%. As such, financing reduces the cash-on-cash return below the cap rate, making it a challenging market for passive investors. Experienced landlords with local relationships may find 95607 workable, but turnkey investors from out of state often struggle due to operational risks and the need for hands-on management.
In summary, while the higher FMR can support rental yields, the overall market presents structural challenges. These include a high price-to-rent ratio of 35.4, elevated vacancy rates of 8.7%, and a tenant-protective state environment. Therefore, 95607 is best suited for seasoned investors who are prepared to manage the complexities of the local 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.