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 | $1,200 |
| 1 Bedroom | $1,370 |
| 2 Bedrooms | $1,720 |
| 3 Bedrooms | $2,190 |
| 4 Bedrooms | $2,710 |
| 5 Bedrooms | $3,144 |
| 6 Bedrooms | $3,521 |
| 7 Bedrooms | $3,803 |
| 8 Bedrooms | $3,993 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,720 | $292,622 | 0.59% | F |
| 3BR | $2,190 | $354,064 | 0.62% | D |
| 4BR | $2,710 | $397,174 | 0.68% | D |
| 5BR | $3,144 | $416,700 | 0.75% | D |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 06382, Montville, CT, provides a clear picture of potential investment yields. Using the annualized Fair Market Rent (FMR) for a 2-bedroom apartment at $1520 per month for fiscal year 2024, the annual rental income would be $18,240. Against the median home value of $332,329, this translates into an implied gross yield of approximately 5.5%. This calculation assumes that the property being analyzed is a single-family home with a 2-bedroom unit.
In contrast, using the market rent figure of $1,172 per month as reported by the Census ACS, the annual rental income would be $14,064. When compared to the median home value, this scenario implies a gross yield of around 4.2%. The difference between these two yields highlights the financial impact of participating in the Section 8 program versus renting at market rates.
The 22.8% renter density in Montville suggests that there is a significant portion of the population who might be interested in rental properties, including those eligible for Section 8 assistance. However, the N/A-day DOM (Days on Market) indicates that there is insufficient data to determine how quickly rental units are typically leased in this area, which could affect the speed at which a Section 8 voucher holder might secure housing.
Given the higher implied gross yield from the FMR scenario, it appears more financially advantageous for landlords and small-portfolio investors to consider Section 8 tenants. However, the decision should also factor in other considerations such as the administrative requirements and potential turnover rates associated with Section 8 properties. The market rent scenario, while offering a lower gross yield, may present a simpler management structure without the complexities of government programs.
To conclude, the Section 8 scenario offers a higher gross yield of 5.5%, compared to the market rent yield of 4.2%. Given the substantial number of renters in the area, the Section 8 option seems more realistic for achieving a higher return on investment, although the lack of specific DOM data introduces some uncertainty into the leasing process.
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.