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 | $1,880 |
| 1 Bedroom | $2,190 |
| 2 Bedrooms | $2,580 |
| 3 Bedrooms | $3,320 |
| 4 Bedrooms | $3,520 |
| 5 Bedrooms | $4,083 |
| 6 Bedrooms | $4,573 |
| 7 Bedrooms | $4,939 |
| 8 Bedrooms | $5,186 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $3,320 | $634,483 | 0.52% | F |
| 4BR | $3,520 | $710,383 | 0.5% | F |
| 5BR | $4,083 | $747,854 | 0.55% | F |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap rate scenario for ZIP code 11720 provides a clear picture of the potential rental income versus the median home value. The Fair Market Rent (FMR) for a two-bedroom apartment in ZIP 11720 for fiscal year 2024 is set at $2570 per month. This translates to an annualized rental income of $30,840. Given the median home value in the area is $640,373, the implied gross yield from a Section 8 lease would be approximately 4.8%. This is calculated by dividing the annual rental income by the median home value.
In contrast, the Zillow Observed Rental Index (ZORI), which reflects the market rent, stands at $3,827 per month for a two-bedroom apartment. Annualizing this figure gives us an annual rental income of $45,924. With the same median home value of $640,373, the implied gross yield from market rent would be around 7.2%. This calculation again involves dividing the annual rental income by the median home value.
The difference between these yields is significant, with the market rent providing a substantially higher gross yield compared to the Section 8 program. However, the decision to participate in Section 8 should also consider the local rental market dynamics. In ZIP 11720, the renter density is 12.6%, indicating that a relatively small portion of the population is actively seeking rentals. This low renter density might suggest that finding tenants willing to pay market rates could be challenging, thereby making the Section 8 option more attractive despite the lower gross yield.
Additionally, the Days on Market (DOM) being listed as N/A suggests either limited data availability or a highly competitive rental market where properties are leased quickly, potentially without needing extensive marketing efforts. For landlords and small-portfolio investors, the choice between Section 8 and market rent will depend on their investment goals, risk tolerance, and the specific characteristics of the ZIP code's rental market.
Given the data, it is evident that while market rent offers a higher gross yield, the realities of the local rental market, particularly the low renter density, may make the Section 8 option a more stable and reliable source of income for some investors. The gross yield from Section 8, at 4.8%, is lower but can provide a steady stream of income with less tenant turnover and more government oversight, which can be appealing in a market with uncertain demand.
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.