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 | $1,710 |
| 1 Bedroom | $1,720 |
| 2 Bedrooms | $2,260 |
| 3 Bedrooms | $2,780 |
| 4 Bedrooms | $3,140 |
| 5 Bedrooms | $3,642 |
| 6 Bedrooms | $4,079 |
| 7 Bedrooms | $4,405 |
| 8 Bedrooms | $4,625 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,720 | $666,841 | 0.26% | F |
| 2BR | $2,260 | $960,904 | 0.24% | F |
| 3BR | $2,780 | $977,580 | 0.28% | F |
| 4BR | $3,140 | $1,247,883 | 0.25% | F |
| 5BR | $3,642 | $1,482,330 | 0.25% | F |
U.S. Census Bureau data (2024)
The potential risks for investing in Section 8 properties in ZIP code 96746 in Kapaa, HI, include significant tenant turnover due to the disparity between the market rent of $3,045 and the Fair Market Rent (FMR) of $2,510 for fiscal year 2026. This gap can lead to frequent changes in occupancy, increasing administrative burdens and costs associated with screening and processing new tenants.
Vacancy exposure is another concern, though specific days on market (DOM) data is unavailable. Given the high rental demand, however, prolonged vacancies may not be as significant an issue as in areas with lower demand.
Deferred maintenance exposure is also noteworthy, considering the typical home value of $952,312 and the median income of $88,802. Landlords may face challenges in maintaining properties up to standard without relying on higher-than-voucher rents, which can be problematic if the property's value does not justify such maintenance costs.
However, these risks are somewhat mitigated by the high renter share of 31.9%. A large proportion of renters typically indicates robust demand for housing assistance, including Section 8 vouchers. This high demand can help ensure a steady stream of qualified tenants, reducing the likelihood of extended vacancies and providing a stable income source.
In conclusion, the investment risk for a first-time Section 8 landlord in ZIP code 96746 in Kapaa, HI, is moderate.
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.