Location: Bellingham, WA | Metro: Bellingham, WA MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,320 |
| 1 Bedroom | $1,350 |
| 2 Bedrooms | $1,620 |
| 3 Bedrooms | $2,250 |
| 4 Bedrooms | $2,710 |
| 5 Bedrooms | $3,144 |
| 6 Bedrooms | $3,521 |
| 7 Bedrooms | $3,803 |
| 8 Bedrooms | $3,993 |
U.S. Census Bureau data (2024)
The analysis for ZIP code 98220 reveals some key insights into the potential returns for landlords and small-portfolio investors considering Section 8 participation. The Fair Market Rent (FMR) for a two-bedroom apartment in this area for fiscal year 2024 is set at $1490 per month. This figure annualizes to $17,880, providing a baseline for government-subsidized rental income.
To derive the gross yield from this, we take the annualized FMR and divide it by the median home value of $508,299. This calculation gives us an implied gross yield of approximately 3.5%. However, this scenario assumes that the property is being rented exclusively through the Section 8 program, which limits the potential rental income to the FMR.
On the other hand, the market rent for the area is currently not available, indicated by the N/A. If we were to consider a typical market scenario where the landlord could potentially command higher rents, the gross yield would be higher than the 3.5% derived from the Section 8 FMR. Without specific market rent figures, we cannot provide a precise gross yield for the market scenario, but it would generally exceed the Section 8 yield due to the absence of rent caps.
Given the renter density of 14.6% in ZIP 98220, it's important to note that the majority of residents are likely homeowners rather than renters. This suggests that landlords should carefully evaluate the demand for rental properties, especially those participating in the Section 8 program, before making investment decisions.
The N/A-day Days on Market (DOM) indicates incomplete data regarding how quickly rental units are typically filled. In a robust rental market, lower DOM values would suggest faster occupancy rates, which could favor market rentals over Section 8 units. However, without this specific data point, it's challenging to make a definitive comparison between the two scenarios.
In conclusion, while the Section 8 program offers a stable, if capped, rental income with an implied gross yield of around 3.5%, the potential for higher yields exists in the market rental scenario. Investors must weigh the stability of government-subsidized rents against the possibility of achieving higher gross yields through market rentals, considering the local rental demand and the relatively low renter density in ZIP 98220.
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.