Location: Whitman County, WA | Metro: Whitman County, WA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $810 |
| 1 Bedroom | $920 |
| 2 Bedrooms | $1,170 |
| 3 Bedrooms | $1,620 |
| 4 Bedrooms | $1,960 |
| 5 Bedrooms | $2,274 |
| 6 Bedrooms | $2,547 |
| 7 Bedrooms | $2,751 |
| 8 Bedrooms | $2,889 |
U.S. Census Bureau data (2024)
The Section 8 cap rate scenario for ZIP 99161 (Palouse, WA) can be analyzed using the Fair Market Rent (FMR) and market rent figures provided. The annualized 2BR FMR for FY 2026 is $1,060, while the market rent based on Census ACS data is $922.
To determine the implied gross yield, we first calculate the annual rental income. For the FMR scenario, the annual rental income is $1,060 multiplied by 12 months, equaling $12,720. Dividing this by the median home value of $345,676 gives an implied gross yield of approximately 3.68%. In the market rent scenario, the annual rental income is $922 multiplied by 12 months, equaling $11,064. This divided by the median home value of $345,676 results in an implied gross yield of about 3.20%.
The difference between these two yields highlights the impact of Section 8 subsidies on rental income. However, the more realistic scenario is likely the market rent figure. This is because the 18.5% renter density suggests that the majority of homes in Palouse, WA, are owner-occupied, reducing the pool of potential Section 8 tenants. Additionally, the lack of available data on days on market (DOM) implies that there might be challenges in securing long-term Section 8 tenants, further supporting the use of market rent figures for a more accurate analysis.
In conclusion, while the Section 8 subsidy provides a higher gross yield at 3.68%, the market rent scenario with a gross yield of 3.20% offers a more practical outlook for landlords and small-portfolio investors in ZIP 99161. Given the low renter density and uncertain demand for Section 8 properties, relying on market rent figures ensures a more grounded investment strategy.
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.