Location: Salem, OR | Metro: Salem, OR 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 | $1,460 |
| 1 Bedroom | $1,470 |
| 2 Bedrooms | $1,920 |
| 3 Bedrooms | $2,660 |
| 4 Bedrooms | $2,910 |
| 5 Bedrooms | $3,376 |
| 6 Bedrooms | $3,781 |
| 7 Bedrooms | $4,083 |
| 8 Bedrooms | $4,287 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,660 | $555,961 | 0.48% | F |
| 4BR | $2,910 | $626,423 | 0.46% | F |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 97385 reveals a distinct difference between federally mandated Fair Market Rent (FMR) and prevailing market rents. Using the annualized 2BR FMR of $1430 for FY 2024, the gross yield for a property in this ZIP code can be calculated. With a median home value of $573,075, the implied gross yield based on FMR is approximately 0.82%. This calculation is derived by multiplying the monthly FMR by 12 months and dividing by the median home value.
In contrast, using the market rent figure of $1,589, the gross yield increases to about 0.89%. This higher yield reflects the actual rental rates landlords might achieve if they were not restricted by the Section 8 program's rate caps. The calculation here is similar, multiplying the monthly market rent by 12 months and then dividing by the median home value.
The 23.6% renter density in ZIP 97385 suggests a significant portion of residents are renters, indicating that there could be a steady demand for rental properties. However, the lack of Days on Market (DOM) data makes it challenging to predict how quickly a property might turn over under the Section 8 program. Typically, a lower DOM would imply faster turnover and potentially more stable income streams, but without specific DOM figures, this remains speculative.
Given the higher market rent of $1,589 compared to the FMR of $1430, the gross yield based on market rent is more realistic for most landlords and small-portfolio investors. It provides a closer approximation to what they could expect to earn in the open market. However, participation in the Section 8 program offers other benefits, such as guaranteed payments through the Housing Choice Voucher program, which can offset the lower gross yield.
For investors considering Section 8 properties in ZIP 97385, understanding these gross yields is crucial for making informed decisions. While the market rent yields a slightly better return at 0.89%, the FMR-based yield of 0.82% should not be dismissed outright, especially when factoring in the security of guaranteed income and the potential for reduced vacancy rates due to the voucher program's popularity among low-income tenants.
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.