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 |
|---|---|---|---|---|
| 3BR | $2,170 | $315,376 | 0.69% | D |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 06380 reveals some interesting insights 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 $1310 per month. When annualized, this translates to an annual rental income of $15,720. In contrast, the market rent based on Census ACS data stands at $1,281 per month, which annualizes to $15,372.
To determine the gross yield, we compare these annual rental incomes against the median home value of $281,992. For the FMR scenario, the gross yield is calculated as follows:
$15,720 / $281,992 = 0.0557 or approximately 5.57%
For the market rent scenario, the calculation is:
$15,372 / $281,992 = 0.0545 or approximately 5.45%
The difference between the two yields is marginal, with the FMR providing a slightly higher gross yield compared to the market rent. However, it's important to consider the local rental dynamics. ZIP 06380 has a renter density of 63.9%, indicating a robust rental market. This high percentage of renters suggests that landlords can potentially command rents closer to the FMR rather than the lower market rent.
The Days on Market (DOM) figure is not available, which could provide further insight into how quickly properties are rented out. Despite this, the strong rental demand implies that landlords should be able to achieve higher rents. Given the data, the FMR-based gross yield of 5.57% is more realistic for landlords participating in the Section 8 program. This yield is still competitive when considering the stability and guaranteed nature of Section 8 tenants, who typically have a lower turnover rate and are required to pay only 30% of their adjusted income towards rent.
In summary, while the market rent offers a gross yield of 5.45%, the FMR-based gross yield of 5.57% aligns better with the local rental conditions and the characteristics of Section 8 tenancy. Landlords should expect to earn closer to the FMR when renting to Section 8 participants, making the 5.57% gross yield a more accurate expectation for their investment returns in ZIP 06380.
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.