Location: Longview-Kelso, WA | Metro: Longview-Kelso, 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 | $1,040 |
| 1 Bedroom | $1,250 |
| 2 Bedrooms | $1,510 |
| 3 Bedrooms | $2,090 |
| 4 Bedrooms | $2,520 |
| 5 Bedrooms | $2,923 |
| 6 Bedrooms | $3,274 |
| 7 Bedrooms | $3,536 |
| 8 Bedrooms | $3,713 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,510 | $384,405 | 0.39% | F |
| 3BR | $2,090 | $506,108 | 0.41% | F |
| 4BR | $2,520 | $561,730 | 0.45% | F |
| 5BR | $2,923 | $610,209 | 0.48% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP 98611 (Castle Rock, WA) reveals a clear discrepancy between federally determined Fair Market Rents (FMRs) and local market rents. Using the annualized 2BR FMR of $1530 for fiscal year 2024, the gross yield for a property in this ZIP code would be approximately 3.2%. This calculation is derived by dividing the annual rent ($1530 x 12 months = $18,360) by the median home value of $480,107.
In contrast, when using the market rent figure of $1,250 (as reported by the Census ACS), the gross yield drops significantly to about 2.6%. This is calculated by multiplying the monthly market rent ($1,250) by 12 months to get an annual rent of $15,000, then dividing by the median home value.
The implied gross-yield from the FMR scenario is higher, at 3.2%, compared to the market rent scenario's 2.6%. However, the actual rental landscape in ZIP 98611 suggests that the market rent figure is more realistic. The ZIP code has a relatively low renter density of 16.2%, indicating that homeownership is prevalent, and the lack of data on days on market (DOM) suggests either a robust housing market or limited turnover, both of which typically favor market rents over subsidized rates.
Given these factors, landlords and small-portfolio investors should consider the lower gross-yield based on market rents as a more accurate reflection of potential returns. While the Section 8 program can provide stable income, the cap rate based on the FMR is likely unattainable for most properties in ZIP 98611, making the market rent scenario the practical benchmark for investment decisions.
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.