Location: Kittitas County, WA | Metro: Kittitas County, WA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,160 |
| 1 Bedroom | $1,270 |
| 2 Bedrooms | $1,660 |
| 3 Bedrooms | $2,300 |
| 4 Bedrooms | $2,770 |
| 5 Bedrooms | $3,213 |
| 6 Bedrooms | $3,599 |
| 7 Bedrooms | $3,887 |
| 8 Bedrooms | $4,081 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 98943 provides a clear picture of the potential returns for landlords and small-portfolio investors. The Federal Market Rent (FMR) for a two-bedroom apartment in the metro area for fiscal year 2026 is set at $1,380 annually, while the market rent based on Census ACS data stands at $1,661 annually. To derive the gross yield for both scenarios, we need to consider the median home value of $397,974.
Using the annualized FMR of $1,380, the implied gross yield for Section 8 properties in ZIP 98943 is approximately 3.5%. This calculation is derived by dividing the annual rental income ($1,380) by the median home value ($397,974). On the other hand, the market rent of $1,661 annually translates into an implied gross yield of about 4.2%, calculated similarly by dividing the annual market rent by the median home value.
The higher gross yield from market rent suggests that it would be more financially beneficial for landlords to rent outside of the Section 8 program. However, the reality of the situation must also take into account the 28.4% renter density in the area, indicating that a significant portion of the population relies on rental housing. Given the high proportion of renters, landlords should consider the stability and security of Section 8 tenants, who typically have reliable income sources and are subject to federal oversight.
The N/A-day DOM (Days on Market) figure implies that there is either insufficient data or a very quick turnover in listings, which could mean strong demand for rental properties in the area. This demand, combined with the 28.4% renter density, supports the argument that Section 8 properties can offer steady cash flow despite the lower gross yield compared to market rates.
In conclusion, while the market rent offers a higher gross yield of 4.2%, the stability provided by Section 8 tenants and the strong local rental market, indicated by the high renter density and quick turnover, make the 3.5% gross yield from FMR a more realistic scenario for long-term investment. Landlords should weigh these factors carefully when deciding whether to participate in the Section 8 program or seek higher yields through market rents.
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.