Location: Kauai County, HI | Metro: Kauai County, HI
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 | $2,250 |
| 1 Bedroom | $2,270 |
| 2 Bedrooms | $2,970 |
| 3 Bedrooms | $3,650 |
| 4 Bedrooms | $4,160 |
| 5 Bedrooms | $4,826 |
| 6 Bedrooms | $5,405 |
| 7 Bedrooms | $5,837 |
| 8 Bedrooms | $6,129 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,970 | $1,531,142 | 0.19% | F |
| 3BR | $3,650 | $2,688,739 | 0.14% | F |
U.S. Census Bureau data (2024)
The potential pitfalls of investing in ZIP 96714 in Hanalei, HI, under the Section 8 program include significant challenges related to tenant turnover and vacancy exposure. At a market rent of $1,481, properties are far below the Fair Market Rent (FMR) of $3,290 for fiscal year 2026 in the metropolitan area. This disparity can lead to higher tenant turnover as individuals might seek more affordable housing outside the program. Landlords should be prepared for frequent changes in occupancy, which can complicate property management.
Vacancy exposure is another critical issue. The average days on market (DOM) is not available, indicating that properties might stay vacant longer than expected due to the limited pool of eligible tenants. This extended vacancy period can significantly impact cash flow, especially considering the high home values typical in the area, which stand at $2,194,084. With a median household income of $132,448, the financial burden of deferred maintenance can be substantial if tenants do not maintain the property adequately.
Despite these risks, the high renter share of 42.9% suggests a robust demand for rental properties, likely including a strong presence of Section 8 voucher holders. High renter density often correlates with increased competition for available units, potentially leading to a higher number of applications and a better chance of securing long-term tenants who are committed to their housing situation.
Verdict: Moderate risk for a first-time Section 8 landlord.
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.