Location: Olympia-Lacey-Tumwater, WA | Metro: Olympia-Lacey-Tumwater, 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 | $1,860 |
| 1 Bedroom | $1,940 |
| 2 Bedrooms | $2,280 |
| 3 Bedrooms | $2,980 |
| 4 Bedrooms | $3,680 |
| 5 Bedrooms | $4,269 |
| 6 Bedrooms | $4,781 |
| 7 Bedrooms | $5,163 |
| 8 Bedrooms | $5,421 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,280 | $588,456 | 0.39% | F |
| 3BR | $2,980 | $530,912 | 0.56% | F |
| 4BR | $3,680 | $612,625 | 0.6% | D |
| 5BR | $4,269 | $662,375 | 0.64% | D |
U.S. Census Bureau data (2024)
A skeptical investor looking into the real estate market in ZIP code 98516, Lacey, WA, might raise several concerns regarding the feasibility of investing in properties here. Let's address these points directly using the available data.
Will FMR $2140 (zip FY 2024) cover the mortgage on a $579,964 home?
The Fair Market Rent (FMR) for ZIP 98516 in fiscal year 2024 is set at $2140. To determine if this will cover the mortgage on a $579,964 home, we need to consider the typical mortgage rates and terms. Assuming a 30-year fixed-rate mortgage at an average rate of 5%, the monthly payment for such a property would be approximately $3,000. This means that the FMR of $2140 does not cover the mortgage payment, leaving a shortfall of nearly $900 per month. Landlords should plan for additional income sources or a higher rental rate to ensure profitability.
Is there enough renter demand at 34.4%?
The percentage of renter-occupied households in ZIP 98516 is 34.4%. While this indicates a moderate level of demand, it's essential to consider the total number of households and the vacancy rate. A 34.4% rental rate suggests a stable but not highly competitive market. However, without specific data on the total number of households and the vacancy rate, it's challenging to quantify the exact demand. It's advisable to research local rental trends and vacancy rates to gauge the actual demand for rental properties.
Will vouchers keep pace with $2,015 market rents?
The question of whether housing vouchers will keep up with market rents of $2,015 in ZIP 98516 hinges on the voucher program's funding and adjustments. The Housing Choice Voucher Program, commonly known as Section 8, periodically reviews and adjusts its payment standards based on local market conditions. As of the latest data, the voucher payment standard for Lacey, WA, is below the market rent of $2,015. However, landlords can negotiate a higher rent if the tenant covers the difference. It's crucial to monitor local HUD updates and adjust rental strategies accordingly to remain competitive while ensuring financial stability.
In conclusion, while ZIP 98516 presents some challenges, particularly with covering mortgage payments and ensuring sufficient renter demand, it also offers opportunities for those willing to adapt their investment strategies. Careful consideration of local market dynamics and federal guidelines is essential for success.
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.