Location: Oxford County, ME | Metro: Oxford County, ME
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,280 |
| 1 Bedroom | $1,430 |
| 2 Bedrooms | $1,840 |
| 3 Bedrooms | $2,550 |
| 4 Bedrooms | $3,080 |
| 5 Bedrooms | $3,573 |
| 6 Bedrooms | $4,002 |
| 7 Bedrooms | $4,322 |
| 8 Bedrooms | $4,538 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 04010 provides a detailed look at potential investment yields based on current Fair Market Rent (FMR) and market rental rates. For a two-bedroom unit, the annualized FMR for FY 2026 is set at $1,940, while the Census ACS reports a market rent of $1,617 per year. These figures are crucial for understanding the gross yield of properties in this area.
Given the median home value of $352,710, we can calculate the implied gross yield for both scenarios. Using the FMR of $1,940, the gross yield would be approximately 0.55%. This is derived by dividing the annualized FMR by the median home value: $1,940 / $352,710 = 0.0055. On the other hand, using the market rent of $1,617, the gross yield drops to about 0.46%, calculated as $1,617 / $352,710 = 0.0046.
The gross yield based on the FMR is higher, suggesting that properties rented through the Section 8 program could offer a better return compared to the general market rent. However, the actual feasibility of achieving these yields depends on several factors, including the local housing market conditions and the specific terms of the Section 8 contracts.
The renter density of 12.3% indicates that only a small portion of the population in ZIP 04010 are renters. This low density might limit the pool of potential tenants, making it challenging to fill units solely through the Section 8 program. The Days on Market (DOM) being N/A suggests that there is either insufficient data or that the market moves so quickly that tracking DOM becomes irrelevant. In such cases, relying on FMR might overestimate the yield, as market dynamics can affect the ability to secure tenants at the full FMR rate.
In conclusion, while the Section 8 FMR of $1,940 implies a gross yield of 0.55%, the more realistic scenario, considering the market rent of $1,617 and the limited renter density, suggests a gross yield closer to 0.46%. Investors should consider these figures as a starting point for their own calculations, factoring in property management costs, vacancy rates, and other expenses to determine the net operating income (NOI).
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.