Location: Knox County, ME | Metro: Knox County, ME
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,260 |
| 1 Bedroom | $1,460 |
| 2 Bedrooms | $1,770 |
| 3 Bedrooms | $2,320 |
| 4 Bedrooms | $2,330 |
| 5 Bedrooms | $2,703 |
| 6 Bedrooms | $3,027 |
| 7 Bedrooms | $3,269 |
| 8 Bedrooms | $3,432 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,320 | $499,366 | 0.46% | F |
U.S. Census Bureau data (2024)
ZIP code 04854 is situated in a small, tranquil town in Maine, characterized by its modest population of 1,482 residents. The area is predominantly owner-occupied, with only 18.4% of the households being renters. This indicates a community where homeownership is valued and prevalent. The median household income stands at $87,325, reflecting a relatively affluent neighborhood. Median home values are notably high at $495,460, which suggests that the town offers a mix of comfortable living spaces and investment opportunities.
Moving into the realm of rental economics, the Fair Market Rent (FMR) for the metro area in fiscal year 2026 is set at $1,730. In contrast, the current market rent, as reported by the Census Bureau's American Community Survey (ACS), is $1,191. This discrepancy between the FMR and actual market rent presents a significant opportunity for landlords and small-portfolio investors. By participating in the Section 8 program, investors can capitalize on the higher FMR rates, effectively increasing their revenue while providing affordable housing options to eligible tenants.
The question then becomes whether this ZIP code is suitable for a hands-off voucher operator or requires a more engaged value-add buyer. Given the high median home value and the disparity between FMR and market rent, a hands-on approach could be more beneficial. Investors who are willing to renovate properties or add amenities to justify higher rents closer to the FMR could see greater returns. However, for those seeking a simpler, less labor-intensive investment, the hands-off model can still provide stable income due to the guaranteed nature of Section 8 vouchers.
In summary, ZIP 04854 offers an attractive landscape for Section 8 investments, particularly for those who are prepared to actively manage and improve their properties to maximize potential earnings. For others, the existing demand for affordable housing coupled with the higher FMR rates ensures a solid, passive income stream.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.