Location: Tillamook County, OR | Metro: Lincoln County, OR
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 | $1,010 |
| 1 Bedroom | $1,030 |
| 2 Bedrooms | $1,340 |
| 3 Bedrooms | $1,840 |
| 4 Bedrooms | $2,240 |
| 5 Bedrooms | $2,598 |
| 6 Bedrooms | $2,910 |
| 7 Bedrooms | $3,143 |
| 8 Bedrooms | $3,300 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,030 | $283,133 | 0.36% | F |
| 2BR | $1,340 | $381,964 | 0.35% | F |
| 3BR | $1,840 | $542,661 | 0.34% | F |
| 4BR | $2,240 | $719,703 | 0.31% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 97368 (Otis, OR) reveals a challenging investment scenario when considering the Fair Market Rent (FMR) and market rent figures relative to the median home value.
First, let's calculate the gross yield based on the annualized 2BR FMR of $1,410 for FY 2026. This equates to an annual rental income of $16,920. Dividing this by the median home value of $449,650 yields a gross rental yield of approximately 3.76%. This calculation assumes that the property can be rented at the FMR rate, which is the maximum allowable rent for Section 8 tenants.
Next, we consider the market rent figure of $1,189, derived from the Census ACS. Annualizing this amount gives us an annual rental income of $14,268. When divided by the median home value of $449,650, this results in a gross rental yield of about 3.17%. This represents the actual rental income landlords might expect from tenants not participating in the Section 8 program.
Given the renter density of 9.0%, it's important to note that only a small portion of the population in ZIP 97368 would be eligible for the Section 8 program. This low density suggests that the market rent scenario is more likely to reflect the reality for most landlords and small-portfolio investors. The fact that the days on market (DOM) is listed as N/A indicates either insufficient data or a highly localized rental market, making it difficult to draw broader conclusions about vacancy rates and rental speed.
In conclusion, while the FMR-based gross rental yield of 3.76% is slightly higher, the more realistic market rent yield of 3.17% should be considered. Landlords must weigh the potential for higher rental income against the administrative burdens and eligibility requirements of the Section 8 program. For most properties in this area, achieving a gross yield of 3.17% through market rents is a more practical expectation.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.