Location: Portsmouth-Rochester, NH | Metro: Boston-Cambridge-Quincy, MA-NH HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $2,130 |
| 1 Bedroom | $2,230 |
| 2 Bedrooms | $2,650 |
| 3 Bedrooms | $3,180 |
| 4 Bedrooms | $3,510 |
| 5 Bedrooms | $4,072 |
| 6 Bedrooms | $4,561 |
| 7 Bedrooms | $4,926 |
| 8 Bedrooms | $5,172 |
U.S. Census Bureau data (2024)
A decision tree for evaluating whether to purchase properties in ZIP code 03827 (East Kingston, NH) for Section 8 investment involves three key steps:
1) Does the Fair Market Rent (FMR) of $2380 cover the debt service on a property valued at $686,546?
Yes: The FMR of $2380 is sufficient to cover the debt service on a property priced at $686,546. This means that the rental income from a Section 8 tenant will be enough to meet mortgage obligations.
No: The FMR of $2380 does not cover the debt service on a property priced at $686,546. In this case, purchasing for Section 8 would not be financially viable without additional income sources or subsidies.
It Depends: This scenario arises if the debt service amount is close to but not exactly covered by the FMR. It requires further analysis of the specific loan terms and interest rates to determine viability.
2) How does the market rent of $1,769 compare to the FMR?
Above: If the market rent exceeds the FMR, then the property is undervalued relative to the FMR. Landlords could potentially face lower occupancy rates or need to find alternative tenants who pay the higher market rate.
At: If the market rent equals the FMR, the property is appropriately valued. There is no financial incentive to seek non-Section 8 tenants over those paying the FMR.
Below: If the market rent is below the FMR, then the property is overvalued relative to the market. However, since the FMR is higher, landlords can still benefit from Section 8 tenants paying the higher FMR rate.
3) Is there sufficient demand from renters?
Yes: If the 5.9% of renters in the area combined with an unknown number of days on the market (DOM) indicates strong demand, then the property can likely be rented out consistently. This is crucial for long-term stability and cash flow.
No: If the 5.9% of renters is too low or the DOM is excessively high, then there is insufficient demand to ensure consistent occupancy. This makes the property less attractive for Section 8 investment.
It Depends: If the 5.9% of renters suggests moderate demand, but the DOM is unknown, it is necessary to investigate the local rental market conditions further. High DOM might indicate difficulty in renting out the property, even if the percentage of renters is decent.
In conclusion, for ZIP 03827, the decision to invest in Section 8 properties hinges on whether the FMR covers the debt service, how market rents compare to the FMR, and the strength of rental demand. If all conditions align favorably, then investing is advisable; otherwise, it may not be a sound financial move.
Data Sources: FMR data from HUD (2027). 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.