Location: Tacoma, WA | Metro: Tacoma, WA HUD Metro FMR Area
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 | $1,380 |
| 1 Bedroom | $1,540 |
| 2 Bedrooms | $1,910 |
| 3 Bedrooms | $2,630 |
| 4 Bedrooms | $2,950 |
| 5 Bedrooms | $3,422 |
| 6 Bedrooms | $3,833 |
| 7 Bedrooms | $4,140 |
| 8 Bedrooms | $4,347 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,910 | $717,331 | 0.27% | F |
| 3BR | $2,630 | $778,678 | 0.34% | F |
U.S. Census Bureau data (2024)
The rent math in ZIP code 98394 does not work favorably for landlords. The HUD Fair Market Rent (FMR) for the area is set at $1890 per month for fiscal year 2024. However, the actual market rent, according to Census ACS data, stands at $843 per month. This significant gap between the FMR and the market rent suggests that landlords may struggle to find tenants willing to pay the higher FMR rate, especially if they are relying on Section 8 vouchers.
Acquisition costs in ZIP 98394 are relatively high, with a median home value of $733,647. Given that the data on days on market (DOM) and the percentage of homes requiring price cuts is not available, it's difficult to provide a precise assessment of how affordable acquisitions are. Nonetheless, the high median home value indicates that purchasing properties could be costly, which might deter some small-portfolio investors looking for affordable entry points.
Tenant demand in ZIP 98394 is moderate. With a total population of 892, the area has a 14.7% renter share. This implies that approximately 131 individuals are potential renters. While the number of potential tenants is limited due to the small population size, the presence of Section 8 vouchers could help fill units that would otherwise remain vacant given the low market rent.
In summary, ZIP 98394 presents a challenging environment for landlords and small-portfolio investors. The disparity between the HUD FMR and the actual market rent makes it difficult to achieve profitability through rental income alone. High acquisition costs add another layer of difficulty, particularly for those with limited capital. Despite these challenges, there is a niche market for Section 8 tenants, which could stabilize occupancy rates. However, the overall economic landscape suggests that success in this area will require careful management and possibly a strategy focused on cost control and efficiency to maintain profitability.
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.