Location: Nome Census Area, AK | Metro: Nome Census Area, AK
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,270 |
| 1 Bedroom | $1,390 |
| 2 Bedrooms | $1,640 |
| 3 Bedrooms | $2,270 |
| 4 Bedrooms | $2,700 |
| 5 Bedrooms | $3,132 |
| 6 Bedrooms | $3,508 |
| 7 Bedrooms | $3,789 |
| 8 Bedrooms | $3,978 |
U.S. Census Bureau data (2024)
The analysis for ZIP code 99778 reveals a challenging environment for landlords and small-portfolio investors considering Section 8 properties. The Federal Market Rent (FMR) for a two-bedroom unit in the metro area for fiscal year 2026 is set at an annualized rate of $18,360 ($1,530 per month), while the market rent stands at $12,756 annually ($1,063 per month).
Given that the median home value is not available, we can infer that the gross yield based on the FMR would be higher than the market rent scenario. To calculate the gross yield, we need to know the property values. However, without the median home value, we can only discuss the potential yields based on the rental income figures.
In the case of Section 8 units, the gross yield would be calculated based on the $18,360 annual income. This represents a significant income stream compared to the market rent of $12,756. For instance, if a property were valued at $250,000, the gross yield from Section 8 would be approximately 7.34%, whereas the market rent would imply a gross yield of about 5.10%. This difference highlights the financial advantage of Section 8 rents over market rents in terms of gross yield.
The renter density in ZIP 99778 is 45.9%, indicating a moderate demand for rental properties. However, the lack of Days on Market (DOM) data means we cannot precisely gauge how quickly properties are rented out. Despite this, the higher gross yield from Section 8 rents suggests a more stable and predictable income source, especially in areas where renter demand is consistent.
While the higher gross yield from Section 8 is attractive, it's important to note that the actual net operating income (NOI) will depend on various factors such as property management costs, vacancy rates, and maintenance expenses. Given the higher income potential, the Section 8 scenario is likely more realistic for achieving a steady cash flow, assuming the property meets the necessary requirements and standards for the program.
To conclude, the Section 8 cap-rate scenario offers a stronger gross yield compared to the market rent scenario, making it a more favorable option for landlords and small-portfolio investors in ZIP 99778. The stability and predictability of the income stream, combined with the higher renter density, support this conclusion.
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.