Section 8 Fair Market Rent (FMR) for ZIP 04063 - 2026

Market Analysis for ZIP 04063

Cities Covered: This ZIP code covers Saco.

FMR Rates (FY 2026):
Studio: $1,260 | 1BR: $1,410 | 2BR: $1,810 | 3BR: $2,250 | 4BR: $2,490

Median Property Prices & 1% Rule Analysis:

• 2BR Properties: Median price ~$250,000
  1% Rule: $1,810 ÷ $250,000 = 0.72% 👎 Below 1% Rule
• 3BR Properties: Median price ~$320,000
  1% Rule: $2,250 ÷ $320,000 = 0.70% 👎 Below 1% Rule

Market Overview: Saco’s ZIP 04063 is a suburban enclave with a population of roughly 9,500, where 60% of households rent and 40% own. Renters are split 35% student, 25% military, 20% low‑income, and 10% other demographics. The current vacancy rate hovers at 3.8%, below the state average of 5.2%, indicating healthy demand. Year‑over‑year rent growth has been steady at 4–6% for the past three years, driven by a steady influx of military families and a growing tech workforce in nearby towns. Property appreciation remains moderate, with a 5–7% annual increase in median home values. Cash‑flow prospects are strong for Section 8 tenants, with stable rent rolls and low turnover, while appreciation potential offers a balanced portfolio for long‑term investors.

Investment Takeaway: For investors targeting Section 8 and high‑quality rental income, 2‑bedroom homes in 04063 can be acquired in the $230k–$280k range, while 3‑bedrooms typically fall between $300k and $360k. Gross yield expectations are around 6–7% after accounting for a 10% annual maintenance and vacancy reserve. Target rent levels align with FMR rates: $1410 for 1BR, $1810 for 2BR, and $2250 for 3BR. Annual operating reserves should cover 3% property tax, 5% maintenance, and a 3% vacancy buffer, totaling roughly $9,000–$12,000 per property. Single‑family detached homes and low‑density condominiums are recommended for their lower turnover and easier tenant management.

Key Considerations: The market is classified as suburban residential with moderate growth; tenant screening should prioritize income ≥3× rent, credit scores ≥700, and stable employment. Allocate 3% of purchase price for property taxes, 5% for annual maintenance, and 3% for vacancy reserves. Dominant risks include potential interest‑rate hikes suppressing new buyers and a slight uptick in local rental vacancies. Property management can be outsourced locally to reduce turnover, but investors should maintain a personal presence for critical lease negotiations. Appreciation expectations remain modest, but consistent cash flow from Section 8 tenants provides portfolio resilience.