Location: Norwich-New London-Willimantic, CT | Metro: Norwich-New London-Willimantic, CT MSA
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 | $1,160 |
| 1 Bedroom | $1,350 |
| 2 Bedrooms | $1,680 |
| 3 Bedrooms | $2,170 |
| 4 Bedrooms | $2,690 |
| 5 Bedrooms | $3,120 |
| 6 Bedrooms | $3,494 |
| 7 Bedrooms | $3,774 |
| 8 Bedrooms | $3,963 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,680 | $301,288 | 0.56% | F |
| 3BR | $2,170 | $389,677 | 0.56% | F |
| 4BR | $2,690 | $463,035 | 0.58% | F |
U.S. Census Bureau data (2024)
The ZIP code 06370 in Montville, CT, presents an interesting balance between yield and stability. With a Fair Market Rent (FMR) of $1,370 for fiscal year 2024, compared to the local market rent of $1,195, there is a potential upside in rental income when considering properties under the Section 8 program. This discrepancy suggests that landlords can achieve higher yields by participating in Section 8, given the government subsidy covers the difference.
The median home value in the area stands at $384,056. When paired with the FMR, it indicates that the cost of entry into the rental market is relatively high, but the potential returns are also attractive due to the higher subsidy rates. However, the ZIP code's low percentage of renters—only 7.6%—indicates limited demand for rental properties, which could impact the stability of cash flow. Landlords should be cautious about vacancy rates and the time it takes to fill vacancies, as the data does not provide days on market (DOM) information, suggesting this might be a less active rental market.
The average household income of $105,700 further complicates the stability assessment. While higher incomes might imply a more reliable tenant pool, the low percentage of renters suggests that many residents prefer homeownership over renting. This dynamic could lead to fewer applicants for Section 8 properties, making it harder to maintain consistent occupancy.
In summary, ZIP 06370 offers a moderate yield with the potential for higher rental income through Section 8 subsidies. However, the market's stability is questionable due to the low percentage of renters and the lack of data on days on market. Landlords should carefully consider the trade-offs between higher yields and potential instability before investing in this area. The strategy should lean towards securing long-term tenants rather than a quick turnover approach, given the limited rental demand.
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.