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 | $1,440 |
| 1 Bedroom | $1,590 |
| 2 Bedrooms | $1,930 |
| 3 Bedrooms | $2,530 |
| 4 Bedrooms | $2,540 |
| 5 Bedrooms | $2,946 |
| 6 Bedrooms | $3,300 |
| 7 Bedrooms | $3,564 |
| 8 Bedrooms | $3,742 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,930 | $416,922 | 0.46% | F |
| 3BR | $2,530 | $488,325 | 0.52% | F |
| 4BR | $2,540 | $628,679 | 0.4% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis for ZIP code 04858, which encompasses South Thomaston, ME, is centered around the significant gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2026, the FMR is set at $1,990, while the Census ACS reports the market rent at $925. This means that the FMR is $1,065 higher than the market rent, representing an increase of approximately 115%.
This substantial discrepancy makes ZIP 04858 a prime yield play for landlords and small-portfolio investors who accept Section 8 vouchers. Despite the lower market rent of $925, landlords can receive payments closer to the FMR rate of $1,990, effectively increasing their rental income significantly. The local context of South Thomaston, where only 7.1% of residents are renters, further supports this strategy. With a median home value of $465,798 and a median income of $87,059, it's evident that the majority of the population owns homes, suggesting limited competition from higher-priced rental properties.
The high FMR relative to the market rent indicates that the government aims to subsidize housing costs in this area, making it financially viable for landlords to accept voucher tenants even if they are renting units below the open-market rates. This scenario benefits both voucher holders, who can afford decent housing, and landlords, who receive guaranteed and higher-than-market rent payments.
However, landlords must be aware of the administrative aspects and potential maintenance costs associated with managing Section 8 properties. Despite these considerations, the financial upside is considerable, given the generous subsidy that bridges the gap between the actual market conditions and the FMR. In conclusion, the unique economic landscape of South Thomaston, combined with the favorable Section 8 rates, presents a compelling opportunity for savvy investors looking to capitalize on this yield play.
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.