Location: Matanuska-Susitna Borough, AK | Metro: Matanuska-Susitna Borough, AK HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $950 |
| 1 Bedroom | $1,000 |
| 2 Bedrooms | $1,310 |
| 3 Bedrooms | $1,820 |
| 4 Bedrooms | $2,200 |
| 5 Bedrooms | $2,552 |
| 6 Bedrooms | $2,858 |
| 7 Bedrooms | $3,087 |
| 8 Bedrooms | $3,241 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap rate for ZIP code 99683 reveals a complex picture due to limited data availability. The Fair Market Rent (FMR) for a two-bedroom property in this area for fiscal year 2024 is set at $1280 per month. This translates to an annual rental income of $15,360. Given the median home value is not available, we cannot calculate a precise cap rate; however, we can still provide a useful comparison based on the information at hand.
If we assume that the median home value is significantly higher than the annualized FMR, the implied gross yield would be relatively low. For instance, if the median home value were $300,000, the gross yield would be approximately 5.1%, calculated by dividing the annual rental income ($15,360) by the median home value ($300,000).
In contrast, if we had the market rent figure, we could compare it directly with the Section 8 FMR to determine which scenario offers a better gross yield. However, since the market rent is not available, we must rely on the known FMR to guide our assessment.
The 9.2% renter density in ZIP 99683 suggests a moderate demand for rental properties, but without knowing the days on market (DOM), it's challenging to assess how quickly these properties might turn over or how competitive the rental market is. A high DOM would indicate slower turnover and potentially lower demand, making the Section 8 scenario more attractive as it provides guaranteed tenants through the voucher program.
Given the lack of market rent data and the moderate renter density, the Section 8 scenario appears to be a safer bet for investors looking for steady, albeit potentially lower, returns. The guaranteed nature of the vouchers offsets the risk associated with vacancy rates, especially in areas where market conditions are uncertain. The gross yield comparison, therefore, leans towards the FMR-based scenario being more reliable for investment planning purposes.
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.