Location: Barnstable Town, MA | Metro: Barnstable Town, MA MSA
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 | $2,220 |
| 1 Bedroom | $2,230 |
| 2 Bedrooms | $2,920 |
| 3 Bedrooms | $3,660 |
| 4 Bedrooms | $4,370 |
| 5 Bedrooms | $5,069 |
| 6 Bedrooms | $5,677 |
| 7 Bedrooms | $6,131 |
| 8 Bedrooms | $6,438 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,920 | $608,584 | 0.48% | F |
| 3BR | $3,660 | $836,054 | 0.44% | F |
| 4BR | $4,370 | $1,159,460 | 0.38% | F |
| 5BR | $5,069 | $2,684,170 | 0.19% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 02635, Barnstable, MA, provides a detailed look at the potential returns for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a 2-bedroom apartment in fiscal year 2024 is set at $2230 annually. This translates into a monthly rental income of approximately $185.83 under the Section 8 program. In contrast, the market rent for a similar unit, as reported by the Census ACS, stands at $2,282 per month.
To derive the gross yield, we use the median home value of $859,655 as our investment basis. For the Section 8 scenario, the annual rental income would be $2230, resulting in a gross yield of roughly 0.26%. On the other hand, if the property were rented at market rates, the annual income would be $27,384 ($2,282 x 12), leading to a gross yield of approximately 3.19%.
The stark difference between these two yields highlights the disparity in income potential. However, the reality of the situation must also take into account the local rental market dynamics. With a renter density of only 11.7%, it's clear that the majority of residents in Barnstable prefer homeownership over renting, which could impact the demand for rental properties. Additionally, the lack of data on the days on market (DOM) suggests there might be limited turnover in the rental market, making it difficult to predict how quickly a vacancy can be filled.
Given these factors, the market rent scenario appears more realistic for most investors seeking higher returns. While the Section 8 program offers stability and a guaranteed tenant through government subsidies, the low gross yield may not be attractive enough to offset the lower income expectations. Investors should consider the local rental market trends and the potential for long-term occupancy when deciding whether to participate in the Section 8 program or aim for market rents.
In summary, the gross yield under Section 8 is 0.26%, while renting at market rates would provide a gross yield of 3.19%. These figures make it evident that market rates offer significantly better returns, aligning with the low renter density and suggesting that landlords and small-portfolio investors should carefully weigh their options before committing to the Section 8 program.
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.