Location: Bangor, ME | Metro: Bangor, ME HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,390 |
| 1 Bedroom | $1,490 |
| 2 Bedrooms | $1,870 |
| 3 Bedrooms | $2,420 |
| 4 Bedrooms | $2,690 |
| 5 Bedrooms | $3,120 |
| 6 Bedrooms | $3,494 |
| 7 Bedrooms | $3,774 |
| 8 Bedrooms | $3,963 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate picture for ZIP code 04469 in Rhode Island reveals some critical insights into potential investment opportunities. The Fair Market Rent (FMR) for a two-bedroom apartment in this area for fiscal year 2024 is set at $1390 per month. However, the median home value and market rent figures are currently unavailable, which complicates a direct comparison.
To derive the implied gross yield, we must first annualize the FMR. At $1390 per month, the annual rent for a two-bedroom unit would be $16,680. Without the median home value, we cannot calculate an exact cap rate, but we can infer that if properties were priced similarly to their FMR-based rental income, the gross yield would reflect the monthly FMR figure.
The lack of specific data on median home values and market rents means that we cannot provide a precise cap rate or gross yield comparison. However, the implied gross yield based on the FMR suggests a conservative estimate of rental income that could be achieved through participation in the Section 8 program.
Given the incomplete data, it's challenging to determine which scenario is more realistic. The renter density percentage and days on market (DOM) are also unspecified, which would typically help in assessing the likelihood of finding tenants willing to pay the FMR versus those who might pay higher market rates.
Investors should note that the Section 8 program provides a guaranteed income source, albeit at fixed rates. This stability can be attractive compared to the variability of market rents, especially in areas where renter demand is strong. However, without knowing the local market dynamics, such as the competition for tenants and the general housing supply, making a definitive judgment on which scenario is more profitable remains speculative.
In conclusion, while the exact cap rate cannot be calculated due to missing data, the annualized FMR of $16,680 offers a baseline for potential gross yields. Investors should consider the guaranteed income stability of Section 8 alongside any available market trends to make informed decisions.
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.