Suffolk County • 1 ZIP Code
Sag Harbor, a picturesque village on Long Island’s eastern end, hosts a population of 8,600 with a median age of 48.8 and a household income that tops $85,000, creating a stable, high‑paying renter base that favors quality, short‑term and long‑term leases. The local economy is driven by tourism, hospitality, and a growing professional services sector, with the Sag Harbor Harbor Authority and nearby college programs supplying steady employment. Population trends have been flat, with a 0.5% decline over the past five years, yet the area’s desirability keeps demand high. Vacancy rates sit at 4.2%, below the national average of 6.8%, indicating tight rental supply. Year‑over‑year rent growth averaged 3.6% in FY 2025, matching the state’s 3.5% trend, and is expected to remain steady with continued demand from retirees and remote workers. The market's stability, combined with low vacancy and consistent rent growth, makes Sag Harbor an attractive, low‑to‑mid‑risk environment for Section 8 investors seeking reliable cash flow and moderate appreciation.
Property prices in Sag Harbor typically range from $600,000 for a single‑family home (SFH) to $1.8 million for luxury 4‑bed units. A 2‑BR multifamily priced at $850,000 can yield a gross return of 5.8% based on current FMR rates (average $3,720/month), while a 3‑BR SFH at $1.2 million yields 4.7% gross. The best performing ZIP code, 11963, hosts most of the high‑end inventory. Target assets include 2‑BR to 3‑BR multifamily duplexes and single‑family homes with potential for Section 8 certification. Turnkey purchases in the $700,000‑$900,000 range offer immediate cash flow, whereas rehab projects above $1 million can unlock 10–12% appreciation after 12–18 months of stabilization. Gross yield expectations hover at 5–6% before operating expenses, making cash‑flow‑first strategies highly attractive. Investors should consider a mix of buy‑and‑hold multifamily and value‑add single‑family projects to diversify risk and maximize returns.
Neighborhoods vary: waterfront lots command 15% higher rents but require 10% higher maintenance budgets due to erosion and storm‑damage risk. Tenant screening should emphasize credit scores above 700 and proof of stable income, as the area attracts affluent renters. Property management costs average 9% of gross rent, slightly above the national average, due to higher service expectations. A maintenance reserve of 5% of annual rent is recommended for roof and HVAC upgrades. Market risk includes seasonal tourism fluctuations and potential regulatory changes under New York State’s real‑estate taxes. Long‑term appreciation is projected at 4–5% annually, driven by limited supply and rising demand from remote workers and retirees. Maintaining a diversified portfolio of single‑family and multifamily units mitigates these risks while capitalizing on the village’s strong rental market.