Location: Lincoln County, WA | Metro: Lincoln County, WA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $970 |
| 1 Bedroom | $1,080 |
| 2 Bedrooms | $1,390 |
| 3 Bedrooms | $1,920 |
| 4 Bedrooms | $2,330 |
| 5 Bedrooms | $2,703 |
| 6 Bedrooms | $3,027 |
| 7 Bedrooms | $3,269 |
| 8 Bedrooms | $3,432 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate picture for ZIP code 99147 reveals some critical insights for landlords and small-portfolio investors. To begin with, the Fair Market Rent (FMR) for a 2-bedroom apartment in this area is set at $1,210 per month for fiscal year 2026, based on metropolitan standards. This translates into an annual rental income of $14,520.
The median home value in ZIP 99147 is $480,288. Using this figure, we can calculate the implied gross yield when considering the Section 8 FMR. The gross yield is derived by dividing the annual rental income by the property value. For the FMR scenario, this would be $14,520 divided by $480,288, resulting in a gross yield of approximately 3.02%. This figure represents the potential return on investment if the property were rented under the Section 8 program at the fair market rate.
However, the market rent for the area is listed as N/A, indicating a lack of available data to compare against the FMR. Without this information, it's challenging to provide a precise gross yield for the market rent scenario. But given that market rents typically exceed FMRs, it's reasonable to infer that the gross yield would likely be higher than the 3.02% calculated using the FMR.
To determine which scenario is more realistic, consider the renter density and days on market (DOM). With a renter density of 2.3%, the competition for rental properties in ZIP 99147 is relatively low. However, the N/A DOM suggests there might be challenges in securing tenants quickly, possibly due to limited rental demand or other market factors.
In conclusion, the Section 8 scenario provides a clear and calculable gross yield of 3.02%, while the market rent scenario, though likely offering a higher gross yield, lacks sufficient data to quantify accurately. Given the low renter density and uncertain DOM, the Section 8 option appears more stable and predictable for investors seeking consistent returns.
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.