Location: San Juan County, WA | Metro: San Juan County, WA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,660 |
| 1 Bedroom | $1,820 |
| 2 Bedrooms | $2,380 |
| 3 Bedrooms | $3,120 |
| 4 Bedrooms | $3,130 |
| 5 Bedrooms | $3,631 |
| 6 Bedrooms | $4,067 |
| 7 Bedrooms | $4,392 |
| 8 Bedrooms | $4,612 |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $2,120 for ZIP 98280 will sufficiently cover the mortgage on a home priced at $1,395,357. To address this, let's break down the numbers. The median home value in this area suggests that the typical mortgage payment for a property of this size could be around $6,500 per month, assuming a 20-year mortgage with an interest rate of 4%. Clearly, the FMR does not cover the entire mortgage, but it does provide a significant portion of the monthly expenses, especially when considering that FMR is designed to cover only a portion of the total housing costs.
The second objection concerns the level of renter demand in ZIP 98280, which stands at 16.1%. This percentage indicates the proportion of households that rent rather than own their homes. While this figure is relatively low, it still represents a substantial number of potential tenants. Moreover, rental demand can vary widely based on factors such as job availability, population growth, and the overall economic health of the region. It's important to note that even a modest increase in these factors can significantly boost the demand for rentals, making this a dynamic and potentially favorable market for landlords.
Lastly, an investor might wonder if the Housing Choice Voucher program can keep up with the market rents of $1,906. The voucher program aims to cover a significant portion of the rent for eligible tenants, but it does not guarantee full coverage of the market rates. In ZIP 98280, landlords participating in the voucher program should expect to receive a payment close to the voucher amount, which is typically set at 30% of the tenant's income. If the voucher amount is less than the market rent, the landlord must decide whether to accept the lower payment or seek non-voucher tenants who can afford higher rents. There is no definitive data to suggest that the voucher program will adjust its payments to match the exact market rents; however, adjustments are made periodically based on local market conditions and federal guidelines.
In conclusion, while the FMR of $2,120 does not fully cover the mortgage on a $1,395,357 home, it still contributes significantly to the monthly housing costs. The rental demand at 16.1% is modest but represents a viable market segment. Lastly, landlords should be prepared for the possibility that voucher amounts may not always align with market rents, necessitating strategic decision-making regarding tenant selection and pricing.
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.