Location: Wrangell City and Borough, AK | Metro: Wrangell City and Borough, AK
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,140 |
| 1 Bedroom | $1,220 |
| 2 Bedrooms | $1,610 |
| 3 Bedrooms | $2,230 |
| 4 Bedrooms | $2,670 |
| 5 Bedrooms | $3,097 |
| 6 Bedrooms | $3,469 |
| 7 Bedrooms | $3,747 |
| 8 Bedrooms | $3,934 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 99903 presents a unique challenge due to limited data points. The Federal Market Rent (FMR) for a two-bedroom apartment in the metropolitan area for fiscal year 2026 is set at $1,510 per month. To annualize this figure, we multiply by 12, resulting in an annual rental income of $18,120.
Given that the median home value in ZIP 99903 is not available, we cannot calculate a precise cap rate for owner-occupied properties. However, we can infer the gross yield for a property rented under Section 8 using the annualized FMR. Assuming a property's value is equivalent to the median home value of a similar ZIP code with comparable characteristics, let's use a hypothetical median home value of $300,000 for illustrative purposes. This would imply a gross yield of approximately 6.04% ($18,120 / $300,000).
The market rent for ZIP 99903 is also not available, making it difficult to compare the gross yields directly. However, if we assume that the market rent is higher than the Section 8 rate, the gross yield for market-rate rentals would be greater than 6.04%. For instance, if the market rent were $2,000 per month, the annual rental income would be $24,000, leading to a gross yield of 8% based on our assumed median home value of $300,000.
Considering the 0.0% renter density in ZIP 99903, it becomes evident that the demand for rental properties is minimal. This low density suggests that the actual occupancy rates for Section 8 properties might be lower than expected, impacting the overall yield. Additionally, the lack of Days on Market (DOM) data indicates that there isn't enough activity to establish a reliable trend in rental property turnover.
In conclusion, while the gross yield for a Section 8 property in ZIP 99903 is estimated at 6.04%, the potential gross yield for market-rate rentals could be significantly higher, around 8% based on our assumptions. The low renter density and lack of market activity make the market-rate scenario less likely to materialize in practice, but it does highlight the potential for higher returns outside of the Section 8 program. Investors should carefully consider these factors when evaluating investment opportunities in ZIP 99903.
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.