Location: Chico, CA | Metro: Chico, 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 | $1,090 |
| 1 Bedroom | $1,220 |
| 2 Bedrooms | $1,540 |
| 3 Bedrooms | $2,140 |
| 4 Bedrooms | $2,580 |
| 5 Bedrooms | $2,993 |
| 6 Bedrooms | $3,352 |
| 7 Bedrooms | $3,620 |
| 8 Bedrooms | $3,801 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,540 | $307,040 | 0.5% | F |
| 3BR | $2,140 | $408,288 | 0.52% | F |
U.S. Census Bureau data (2024)
A skeptical investor considering Forest Ranch, CA (ZIP 95942), might have several valid concerns regarding the feasibility of investing in the area. Let's address these concerns with the available data.
Objection 1: Will FMR $1430 (zip FY 2024) cover the mortgage on a $369,899 home?
The Fair Market Rent (FMR) for a one-bedroom unit in ZIP 95942 is set at $1430 for fiscal year 2024. To determine if this will cover the mortgage on a home priced at $369,899, we need to consider the typical mortgage payments based on current interest rates. However, without specific interest rate data, we can only estimate that a monthly mortgage payment for a property around this price could range widely depending on down payment and financing terms. For instance, with a 20% down payment and a 30-year fixed-rate mortgage at an average rate, the monthly payment could be approximately $1,400 to $1,600. Thus, the FMR of $1430 would barely cover the mortgage payment, leaving little room for other expenses such as maintenance, utilities, and property taxes. This suggests that while the rent might cover the mortgage, it would be tight.
Objection 2: Is there enough renter demand at 2.7%?
The rental vacancy rate for ZIP 95942 stands at 2.7%, indicating a strong demand for rentals. A low vacancy rate is generally favorable for landlords as it means less time spent with vacant properties and more consistent income. However, the data does not provide a detailed breakdown of the number of renters versus homeowners or the trend over time. It is important to note that even though the vacancy rate is low, the percentage alone does not guarantee high occupancy rates or long-term tenant stability. Additional research into the local job market and population growth trends would be necessary to fully assess the sustainability of this demand.
Objection 3: Will vouchers keep pace with N/A market rents?
The data does not specify whether housing voucher usage is prevalent in ZIP 95942 or how closely the value of those vouchers aligns with market rents. In areas where housing assistance programs are utilized, it is crucial for landlords to ensure that the voucher amounts will cover the costs associated with renting out their properties. Without specific information on voucher amounts and their adjustment frequency, it is difficult to definitively state whether they will keep pace with market rents. Investors should consult local housing authorities to understand the dynamics of voucher programs and their impact on rental income.
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.