Location: Franklin County, MA | Metro: Berkshire County, MA (part) HUD Metro FMR Area
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 | $1,230 |
| 1 Bedroom | $1,280 |
| 2 Bedrooms | $1,680 |
| 3 Bedrooms | $2,230 |
| 4 Bedrooms | $2,720 |
| 5 Bedrooms | $3,155 |
| 6 Bedrooms | $3,534 |
| 7 Bedrooms | $3,817 |
| 8 Bedrooms | $4,008 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,280 | $168,981 | 0.76% | D |
| 2BR | $1,680 | $241,056 | 0.7% | D |
| 3BR | $2,230 | $272,245 | 0.82% | C |
| 4BR | $2,720 | $291,229 | 0.93% | C |
| 5BR | $3,155 | $309,970 | 1.02% | B |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 01247, North Adams, MA, reveals some interesting insights. To start, let's annualize the Fair Market Rent (FMR) for a two-bedroom apartment, which stands at $1360 per month according to FY 2024 data. This translates to an annual rental income of $16,320. Given the median home value in the area is $255,853, the implied gross yield for a Section 8 property would be approximately 6.4%. This calculation is based on the FMR, which is the maximum amount that the government will pay towards a tenant's rent.
Next, let's consider the market rent, which is reported at $802 per month according to Census ACS data. Annualizing this figure gives us an annual rental income of $9,624. Using the same median home value, the implied gross yield for a market-rent property would be roughly 3.8%. This is significantly lower than the gross yield implied by the Section 8 FMR, reflecting the difference between government-subsidized rents and what the market can bear.
The 44.1% renter density in North Adams suggests a moderate demand for rental properties, but it does not necessarily indicate the proportion of tenants who might qualify for Section 8 housing. The N/A-day Days on Market (DOM) figure implies that there is either insufficient data or that rental properties are being leased quickly, which could support higher rental yields such as those seen in the Section 8 scenario. However, the actual gross yield will depend on the specific mix of Section 8 versus market-rate tenants in any given portfolio.
In practice, the 6.4% gross yield derived from the Section 8 FMR is likely more stable and predictable compared to the market-rate scenario. This is because Section 8 rents are set by the government and are less subject to market fluctuations. For small-portfolio investors and landlords, this stability can be a significant advantage, especially when considering the long-term viability of rental investments.
However, it's important to note that while the Section 8 gross yield appears more favorable, the reality of managing a Section 8 property comes with additional administrative requirements and potential challenges that must be weighed against the financial benefits. Nonetheless, the higher gross yield of 6.4% versus 3.8% provides a clear financial incentive for landlords to consider Section 8 participation, particularly in light of the strong demand for rental housing in North Adams.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.