Location: Walla Walla, WA | Metro: Walla Walla, 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 | $1,080 |
| 1 Bedroom | $1,140 |
| 2 Bedrooms | $1,490 |
| 3 Bedrooms | $2,060 |
| 4 Bedrooms | $2,490 |
| 5 Bedrooms | $2,888 |
| 6 Bedrooms | $3,235 |
| 7 Bedrooms | $3,494 |
| 8 Bedrooms | $3,669 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,490 | $325,141 | 0.46% | F |
| 3BR | $2,060 | $411,952 | 0.5% | F |
| 4BR | $2,490 | $470,811 | 0.53% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP 99324 (College Place, WA) reveals two distinct scenarios based on the Federal Market Rent (FMR) and the actual market rent. For a 2BR unit, the annualized FMR for FY 2024 is $1350, while the Zillow Observed Rent Index (ZORI) stands at $1,723.
Given the median home value of $407,168, we can calculate the implied gross yield for both scenarios. First, using the FMR, the annual rental income would be $1350 * 12 = $16,200. This results in an implied gross yield of ($16,200 / $407,168) * 100 = 3.98%. Second, using the market rent, the annual rental income would be $1,723 * 12 = $20,676, leading to an implied gross yield of ($20,676 / $407,168) * 100 = 5.08%.
The higher gross yield of 5.08% derived from the market rent is more realistic when considering the 35.5% renter density in College Place. The renter density indicates that over one-third of the population rents their homes, suggesting a reasonable demand for rental properties. However, the N/A-day Days on Market (DOM) suggests incomplete data, which could imply either very quick or very slow sales, depending on the context. Given the limited data, it's prudent to focus on the market rent scenario, as it reflects the current rental market conditions more accurately.
Investors should note that these gross yields do not account for operating expenses, vacancies, or other costs associated with property management. Nevertheless, the difference between a 3.98% and a 5.08% gross yield is significant, especially for those who are considering long-term investments in the area. The higher gross yield based on market rent provides a better indication of potential returns, although the actual net operating income (NOI) will depend on individual property management practices and local economic factors.
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.