Location: Hancock County, ME | Metro: Hancock County, ME
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,110 |
| 1 Bedroom | $1,120 |
| 2 Bedrooms | $1,360 |
| 3 Bedrooms | $1,850 |
| 4 Bedrooms | $1,930 |
| 5 Bedrooms | $2,239 |
| 6 Bedrooms | $2,508 |
| 7 Bedrooms | $2,709 |
| 8 Bedrooms | $2,844 |
U.S. Census Bureau data (2024)
A landlord considering purchasing a property in ZIP code 04408 (RI) for Section 8 must follow a structured decision-making process based on the following criteria:
1. Does the Fair Market Rent (FMR) of $1,270 cover the debt service on a property valued at $188,970?
Yes: The FMR of $1,270 is sufficient to cover the debt service on a property priced at $188,970. This indicates that the rental income can support the mortgage payments, making it financially viable.
No: The FMR of $1,270 does not clear the debt service on a property costing $188,970. In this case, the rental income would be insufficient to meet the mortgage obligations, suggesting that investing in this ZIP code for Section 8 purposes is not advisable.
It Depends: If the property's value is significantly lower or higher than $188,970, the FMR might or might not cover the debt service. It requires a precise calculation of the debt service based on the actual property price and interest rates.
2. How does the market rent of $1,375 compare to the FMR?
Above: With a market rent of $1,375 being above the FMR of $1,270, landlords could potentially charge higher rents outside of Section 8, which provides flexibility and higher revenue opportunities.
At: The market rent aligns closely with the FMR, indicating that landlords would likely need to rely on Section 8 tenants to fill vacancies. However, this alignment ensures stable occupancy and predictable income.
Below: If the market rent were below the FMR, it would suggest an anomaly in the data since $1,375 is already above $1,270. Nonetheless, if such a scenario occurred, it would indicate that landlords might struggle to find non-Section 8 tenants willing to pay the FMR.
3. Is there enough demand with 16.1% of residents being renters and the Days on Market (DOM) being N/A?
Yes: Given that 16.1% of residents are renters and assuming that the DOM is not unusually high, the demand appears sufficient. This percentage of renters suggests a steady pool of potential tenants.
No: If the DOM were very high, it would indicate difficulty in finding tenants, even among the 16.1% of renters. A long DOM suggests weak demand, which could jeopardize the financial viability of a Section 8 investment.
It Depends: Without specific DOM data, it's challenging to assess the exact level of demand. However, the 16.1% renter rate is relatively low, implying that demand might be tight. Landlords should investigate further into local vacancy rates and tenant turnover to make a more informed decision.
In conclusion, for ZIP 04408, the FMR sufficiently covers debt service on a $188,970 property, the market rent is above the FMR, and the renter rate suggests some demand, though the lack of DOM data introduces uncertainty. Landlords should proceed with caution, ensuring they have accurate financial projections and understand the local rental market dynamics.
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.