Location: Sagadahoc County, ME | Metro: Sagadahoc County, ME HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,190 |
| 1 Bedroom | $1,360 |
| 2 Bedrooms | $1,700 |
| 3 Bedrooms | $2,350 |
| 4 Bedrooms | $2,840 |
| 5 Bedrooms | $3,294 |
| 6 Bedrooms | $3,689 |
| 7 Bedrooms | $3,984 |
| 8 Bedrooms | $4,183 |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 04548 provides valuable insights into the potential returns for landlords and small-portfolio investors. The Fair Market Rent (FMR) for a 2-bedroom apartment in this area for FY 2024 is set at $1,120 per month, while the market rent based on Census ACS data stands at $1,431 per month.
To calculate the implied gross yield, we use the median home value of $687,573 as a reference point. For the Section 8 scenario, annualizing the FMR of $1,120 gives us an annual rental income of $13,440. Dividing this by the median home value yields an implied gross yield of approximately 1.96%. In contrast, using the market rent of $1,431 results in an annual rental income of $17,172, leading to an implied gross yield of about 2.50%.
The higher gross yield from market rents suggests a better financial performance compared to the Section 8 program. However, it's important to consider the local rental market dynamics. With a renter density of 16.6%, competition for tenants might be lower, which could affect the ability to consistently achieve market rents. Additionally, the lack of data on days on market (DOM) means there is no clear indication of how quickly properties can be rented out at market rates.
Given these factors, the Section 8 gross yield of 1.96% is likely more stable and predictable. While the 2.50% gross yield from market rents represents a higher return, the difficulty in achieving and maintaining those rates could make the Section 8 option a safer bet for long-term investment stability in ZIP 04548.
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.