Location: Bellingham, WA | Metro: Bellingham, WA 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 | $1,440 |
| 1 Bedroom | $1,480 |
| 2 Bedrooms | $1,810 |
| 3 Bedrooms | $2,470 |
| 4 Bedrooms | $3,030 |
| 5 Bedrooms | $3,515 |
| 6 Bedrooms | $3,937 |
| 7 Bedrooms | $4,252 |
| 8 Bedrooms | $4,465 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,810 | $541,762 | 0.33% | F |
| 3BR | $2,470 | $684,260 | 0.36% | F |
| 4BR | $3,030 | $797,158 | 0.38% | F |
U.S. Census Bureau data (2024)
The analysis of ZIP code 98240 in Custer, WA, reveals a unique position in the real estate market, characterized by both yield and stability factors. With a Fair Market Rent (FMR) of $1730 for the fiscal year 2024, it stands out compared to the non-available market rent data, suggesting a potentially lucrative rental environment. However, the median home value at $658,645 indicates a higher investment cost, which must be weighed against the expected rental income.
The stability of the area can be assessed through several indicators. The percentage of renters at 7.0% is notably low, indicating that the majority of residents prefer homeownership over renting. This could lead to lower demand for rental properties and thus affect the overall cash flow and vacancy rates. Additionally, the median household income of $110,116 suggests that tenants have the financial capacity to meet their rental obligations, contributing to a stable rental market. However, without specific data on days-on-market (DOM), it's challenging to gauge how quickly rental properties might turn over or the competition level within the rental market.
Given these figures, ZIP 98240 does not align perfectly with either a high-yield/low-stability flip-style market or a steady-cashflow zone. Instead, it represents an area with moderate potential for yield due to the FMR being significantly lower than the median home value, implying a need for careful consideration of property management costs and vacancy risks. The low percentage of renters and limited DOM data point towards a less dynamic rental market, suggesting stability but also caution regarding the rapidity of returns on investment.
To conclude, while there is potential for rental income in Custer, WA, the relatively low demand for rentals and the high cost of entry into the market suggest a balance between yield and stability. Landlords and small-portfolio investors should focus on properties that offer a good return relative to their investment, while also ensuring they manage risks associated with a less active rental market.
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.