Location: Nantucket County, MA | Metro: Nantucket County, MA
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 | $2,510 |
| 1 Bedroom | $2,750 |
| 2 Bedrooms | $3,600 |
| 3 Bedrooms | $4,290 |
| 4 Bedrooms | $5,420 |
| 5 Bedrooms | $6,287 |
| 6 Bedrooms | $7,041 |
| 7 Bedrooms | $7,604 |
| 8 Bedrooms | $7,984 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,750 | $1,460,512 | 0.19% | F |
| 2BR | $3,600 | $1,797,559 | 0.2% | F |
| 3BR | $4,290 | $2,453,153 | 0.17% | F |
| 4BR | $5,420 | $3,724,816 | 0.15% | F |
| 5BR | $6,287 | $6,316,467 | 0.1% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 02554, which encompasses parts of Nantucket, MA, centers around the discrepancy between the Fair Market Rent (FMR) and the actual market rent. The FMR for the fiscal year 2026 is set at $3,140, whereas the Census ACS data indicates a market rent of $2,224. This creates a significant gap of $916, or approximately 41%, between what voucher tenants can pay and the open-market rental price.
Given that the FMR exceeds the market rent, it becomes evident that properties participating in the Section 8 program have the potential to generate higher yields compared to those rented at open-market rates. Landlords who accept vouchers can command rents closer to the FMR, thereby increasing their income per unit. For instance, a landlord renting an apartment for $2,224 might receive up to $3,140 through the Section 8 program, making it a lucrative opportunity for maximizing returns.
In Nantucket, where only 28.8% of residents are renters, and the median home value stands at $3,043,762 with a median household income of $140,938, the dynamics of the rental market are unique. The high median home value suggests a predominantly owner-occupied environment, while the relatively low median income implies that many renters may rely on assistance programs such as Section 8 to afford housing. Thus, accepting voucher tenants can be seen as a way to fill vacancies and achieve better rental rates in a niche market.
However, there are considerations beyond the immediate financial benefits. The cost of maintaining compliance with the Section 8 program, including regular inspections and paperwork, must be factored into the investment strategy. Additionally, landlords must ensure that their units meet the Housing Quality Standards (HQS) required by the program, which can involve additional expenses.
In summary, the Section 8 program in ZIP 02554 offers a yield advantage due to the $916 gap between FMR and market rent. This makes it a strategic option for landlords looking to capitalize on higher rental rates while serving a population that may struggle to find affordable housing in the local market.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.