Location: Hawaii County, HI | Metro: Hawaii 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 | $1,440 |
| 1 Bedroom | $1,450 |
| 2 Bedrooms | $1,870 |
| 3 Bedrooms | $2,360 |
| 4 Bedrooms | $2,730 |
| 5 Bedrooms | $3,167 |
| 6 Bedrooms | $3,547 |
| 7 Bedrooms | $3,831 |
| 8 Bedrooms | $4,023 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,870 | $755,379 | 0.25% | F |
| 3BR | $2,360 | $745,729 | 0.32% | F |
| 4BR | $2,730 | $968,596 | 0.28% | F |
U.S. Census Bureau data (2024)
The Section 8 program in ZIP code 96750, which encompasses Kealakekua, HI, presents a compelling opportunity for landlords and small-portfolio investors due to the significant gap between the Fair Market Rent (FMR) and the actual market rent. The FMR for the metro area in fiscal year 2026 is set at $1,870, while the Census ACS reports the average market rent at $974. This creates a gap of $896 per month, representing an increase of approximately 92% over the market rent.
This substantial difference means that landlords can effectively participate in a yield play. Voucher tenants provide a guaranteed and reliable source of income, which is pegged at the higher FMR rate rather than the lower market rent. For instance, a landlord renting out a property at the market rate of $974 would see a significant increase in rental income by accepting Section 8 vouchers, thus enhancing their overall yield.
In the context of Kealakekua, where only 22.3% of residents are renters, the competition for rental properties is relatively low. This further supports the attractiveness of the Section 8 program, as it ensures a steady stream of tenants. Additionally, the median home value in the area is $764,327, indicating a high-value residential market. However, the median household income is $92,576, suggesting that many residents may struggle to afford market rents without assistance.
The higher FMR rate also serves to offset some of the potential costs associated with housing voucher tenants. These costs might include administrative burdens, maintenance requirements, and the need for compliance with HUD standards. Despite these considerations, the financial benefit of closing the gap between the FMR and the market rent makes the Section 8 program a valuable tool for increasing rental income in Kealakekua.
Investors should note that while the Section 8 program offers attractive financial incentives, it requires adherence to certain regulations and guidelines. Nonetheless, the potential for increased rental yields, combined with the stability of tenant payments, makes it a worthwhile consideration for real estate investments in ZIP 96750.
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.