Location: Chautauqua County, NY | Metro: Chautauqua County, NY
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 | $800 |
| 1 Bedroom | $890 |
| 2 Bedrooms | $1,150 |
| 3 Bedrooms | $1,520 |
| 4 Bedrooms | $1,580 |
| 5 Bedrooms | $1,833 |
| 6 Bedrooms | $2,053 |
| 7 Bedrooms | $2,217 |
| 8 Bedrooms | $2,328 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,150 | $179,881 | 0.64% | D |
| 3BR | $1,520 | $176,979 | 0.86% | C |
| 4BR | $1,580 | $192,876 | 0.82% | C |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 14781 (Sherman, NY) provides valuable insights into potential investment opportunities. Using the Fair Market Rent (FMR) for a two-bedroom apartment set at $1,110 annually (for FY 2026, metro area), and the market rent figure of $838 (based on Census ACS data), we can calculate the implied gross yields against the median home value of $165,804.
In the scenario where the rental income is based on the annualized FMR of $1,110, the implied gross yield is approximately 6.7%. This calculation is derived by dividing the annual rental income ($1,110) by the median home value ($165,804). On the other hand, if we use the market rent of $838, the implied gross yield drops significantly to about 5.0%, calculated similarly by dividing $838 by $165,804.
The 19.1% renter density in Sherman, NY, suggests that while there is a notable portion of renters, the majority of residents are homeowners. This indicates that the market rent scenario might be more realistic, as it reflects the actual rental rates paid by tenants in the area. However, the FMR scenario could still be relevant for investors interested in Section 8 housing, as it represents the government-set maximum rental rates for eligible families.
The N/A-day DOM (Days on Market) data point implies that listings may either be infrequent or quickly sold, making it challenging to gauge the typical time frame for property turnover. Despite this, the lower gross yield from the market rent scenario (5.0%) is likely more reflective of the actual rental environment in Sherman, NY, due to the higher proportion of homeowners and potentially lower demand for rental properties.
To conclude, while the FMR-based gross yield of 6.7% is attractive, the market rent-based gross yield of 5.0% offers a more grounded expectation for landlords and small-portfolio investors considering properties in ZIP 14781. The reality of the local rental market should be carefully considered alongside the potential benefits of participating in the Section 8 program.
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.