Location: Northeastern Connecticut Planning Region, CT | Metro: Northeastern Connecticut Planning Region, CT
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,450 |
| 1 Bedroom | $1,670 |
| 2 Bedrooms | $2,090 |
| 3 Bedrooms | $2,660 |
| 4 Bedrooms | $3,130 |
| 5 Bedrooms | $3,631 |
| 6 Bedrooms | $4,067 |
| 7 Bedrooms | $4,392 |
| 8 Bedrooms | $4,612 |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 06264 provides insight into potential investment 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 $1850 per month. When annualized, this figure translates to an annual rental income of $22,200.
To calculate the gross yield based on the median home value of $373,891, we use the formula:
Gross Yield = (Annual Rental Income / Property Value) * 100
Substituting the values, the gross yield for a 2BR property under Section 8 would be:
(22,200 / 373,891) * 100 ≈ 5.94%
This indicates that, if a landlord were to purchase a property at the median value, they could expect a gross yield of approximately 5.94% when renting it out through the Section 8 program. However, it's important to note that this calculation does not account for operating expenses, vacancy rates, or other costs that would affect the net operating income (NOI).
Given the current data, the market rent for 2BR properties in ZIP 06264 is not available, making it difficult to compare the gross yields directly between Section 8 and market rents. However, considering the 21.0% renter density, it suggests that a significant portion of the population in this area relies on rental housing, which can be indicative of a stable demand for rental units, including those participating in the Section 8 program.
The days on market (DOM) information is also not available, which would typically help us understand how quickly properties are rented out in this area. Without this data, it's challenging to predict the vacancy rate and thus the exact impact on the gross yield. Nonetheless, the presence of a substantial number of renters implies a steady stream of potential tenants for Section 8 properties.
In conclusion, the Section 8 cap-rate scenario for ZIP 06264 presents a gross yield of about 5.94%, based on the annualized FMR and median home value. This figure offers a clear benchmark for landlords and small-portfolio investors looking to enter the Section 8 market in this ZIP code. While the lack of market rent data prevents a direct comparison, the existing conditions point towards a stable rental environment, favoring the reliability of Section 8 contracts over the uncertainty of market fluctuations.
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.