Location: Fitchburg-Leominster, MA | Metro: Fitchburg-Leominster, MA 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 | $1,320 |
| 1 Bedroom | $1,570 |
| 2 Bedrooms | $1,900 |
| 3 Bedrooms | $2,420 |
| 4 Bedrooms | $2,830 |
| 5 Bedrooms | $3,283 |
| 6 Bedrooms | $3,677 |
| 7 Bedrooms | $3,971 |
| 8 Bedrooms | $4,170 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,900 | $353,271 | 0.54% | F |
| 3BR | $2,420 | $418,604 | 0.58% | F |
| 4BR | $2,830 | $438,966 | 0.64% | D |
| 5BR | $3,283 | $469,525 | 0.7% | D |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate picture for ZIP code 01475, Winchendon, MA, reveals key insights into potential investment opportunities. The Fair Market Rent (FMR) for a two-bedroom apartment in this area for FY 2024 is set at $1510 annually per unit. Using the median home value of $398,616, we can calculate the implied gross yield based on this figure. For a two-bedroom apartment, the annual rental income would be $1510 multiplied by the number of units in the property. If we assume a single-family home with two bedrooms could be converted into a two-unit property, the total annual rental income under Section 8 would be $3020. This translates to an implied gross yield of approximately 0.76%, calculated as $3020 divided by $398,616.
In contrast, the market rent for a two-bedroom apartment is estimated at $1,240 annually based on Census ACS data. Following similar logic, if the same two-bedroom property were rented out at market rates, the total annual rental income would be $2480, leading to an implied gross yield of about 0.62%. This calculation is based on the assumption that the property can be fully rented at market rates.
Given the 23.0% renter density in Winchendon, it is important to consider the likelihood of achieving full occupancy at either rate. The fact that the Days on Market (DOM) is listed as N/A suggests a lack of recent sales data, which could indicate a stable market where homes do not quickly change hands. However, the higher implied gross yield from Section 8 rentals, at 0.76%, compared to the market rate yield of 0.62%, makes the former more attractive for investors seeking guaranteed income through government subsidies.
Despite the higher yield, investors must weigh this against the administrative complexities and long-term commitments often associated with Section 8 properties. The lower yield from market rents, however, offers flexibility and potentially higher returns should market conditions improve. Given the relatively low renter density, achieving full occupancy at market rates might prove challenging, making the stability and predictability of Section 8 rents more appealing for this ZIP code.
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.