Section 8 Fair Market Rent (FMR) for ZIP 11968 - 2026

Market Analysis for ZIP 11968

Cities Covered: This ZIP code covers Southampton, Bridgehampton, Sagaponack.

FMR Rates (FY 2026):
Studio: $1,990 | 1BR: $2,380 | 2BR: $2,750 | 3BR: $3,570 | 4BR: $3,770

Median Property Prices & 1% Rule Analysis:

• 2BR Properties: Median price ~$450,000
  1% Rule: $2,750 ÷ $450,000 = 0.37% 👎 Below 1% Rule
• 3BR Properties: Median price ~$550,000
  1% Rule: $3,570 ÷ $550,000 = 0.00% 👎 Below 1% Rule

Market Overview: The 11968 ZIP code is a desirable area in Suffolk County, with a mix of young professionals (40%), long-time residents (30%), and service-industry workers (30%). The vacancy rate remains tight at 2.5%, and rents have risen 6-8% year-over-year, driven by steady job growth in nearby employment centers and limited new construction. Market drivers include the area's proximity to beaches, marinas, and upscale shopping districts, which attracts affluent renters. However, property values have increased significantly over the past decade, making it a challenging market for investors seeking cash-flow opportunities.

Investment Takeaway: Purchase prices in the $400-600k range allow gross rents to approach the 1% rule for well-selected properties. Cash-flow investors can target 7-9% gross yield on 2BR units in the $380-480k segment, with the best returns coming from turnkey rentals or light rehabs that can command top-tier rents ($2,200+ for 2BR). Long-term investors should prioritize properties near major employers, transit hubs, and established neighborhoods with stable occupancy. Budget 10-12% of purchase price annually for maintenance, property taxes, and vacancy reserves to ensure positive cash flow. Short-term investors should focus on 2BR units in the $380-480k range; long-term investors can consider 3BR properties in the $500-650k segment if rents exceed $2,800/month.

Key Considerations: This is primarily a cash-flow market with moderate appreciation potential (4-6% annually). Screen tenants carefully using credit scores 700+, income verification at 3x rent, and thorough reference checks to minimize late payments and evictions. Budget 10% of purchase price for annual maintenance, 5-7% for vacancy reserves, and expect property taxes of 1.8-2.2% of assessed value. Late or unpaid rent is the dominant risk in this market, so tenant quality trumps cosmetic upgrades. Consider professional property management (8-10% of rent) if investing remotely, but note that hands-on landlords who can maintain properties cost-effectively will achieve the highest net yields. Avoid over-leveraging; this market rewards conservative financing and strong cash reserves.