Location: Nassau-Suffolk, NY | Metro: Nassau-Suffolk, NY HUD Metro FMR Area
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 | $2,070 |
| 1 Bedroom | $2,410 |
| 2 Bedrooms | $2,830 |
| 3 Bedrooms | $3,640 |
| 4 Bedrooms | $3,860 |
| 5 Bedrooms | $4,478 |
| 6 Bedrooms | $5,015 |
| 7 Bedrooms | $5,416 |
| 8 Bedrooms | $5,687 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $3,640 | $848,189 | 0.43% | F |
| 4BR | $3,860 | $1,081,556 | 0.36% | F |
| 5BR | $4,478 | $1,813,775 | 0.25% | F |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate picture for ZIP code 11557 reveals two distinct scenarios based on the Federal Market Rent (FMR) and the market rent. For the FMR scenario, the annualized 2-bedroom rent is $2640, while the market rent is $1,434 per month according to the Census ACS data.
To derive the gross yield for the FMR scenario, we calculate the annual rent ($2640) divided by the median home value ($995,329), which results in an implied gross yield of approximately 0.265%. This means that if a landlord were to lease a property under the Section 8 program at the FMR rate, they would earn roughly 0.265% of the property's value annually in rent.
For the market rent scenario, the monthly rent of $1,434 annualizes to $17,208. Dividing this by the median home value gives us an implied gross yield of about 1.73%. This suggests that leasing a property at the market rate could generate nearly 1.73% of the property's value in rent annually.
Given the 9.6% renter density in ZIP 11557, it is important to note that the number of days on the market (DOM) is listed as N/A. This indicates that there might be limited data available regarding how quickly properties are rented out in this area, which can affect the realism of the gross yields calculated above.
The market rent scenario appears more realistic due to the higher implied gross yield compared to the FMR scenario. However, the actual decision to participate in the Section 8 program versus renting at market rates should consider other factors such as the stability of tenant income, maintenance responsibilities, and the likelihood of finding a tenant willing to pay the market rate in an area with relatively low renter density.
In summary, the gross yield from Section 8 at the FMR rate is significantly lower than the gross yield from renting at the market rate. Investors must weigh these figures against the broader context of the local rental market and their investment goals.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.