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 | $1,530 |
| 1 Bedroom | $1,540 |
| 2 Bedrooms | $1,990 |
| 3 Bedrooms | $2,510 |
| 4 Bedrooms | $2,780 |
| 5 Bedrooms | $3,225 |
| 6 Bedrooms | $3,612 |
| 7 Bedrooms | $3,901 |
| 8 Bedrooms | $4,096 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,540 | $228,151 | 0.67% | D |
| 2BR | $1,990 | $399,942 | 0.5% | F |
| 3BR | $2,510 | $445,519 | 0.56% | F |
U.S. Census Bureau data (2024)
The rent math in ZIP 96772, Naalehu, HI, does not fully align with the financial expectations set by the Federal Housing Administration's Fair Market Rent (FMR). The FMR for the metro area for fiscal year 2026 is set at $1,870. However, the current market rent, as reported by the Census Bureau's American Community Survey (ACS), stands at $1,603. This discrepancy suggests that landlords might face challenges in achieving the higher FMR through rental income alone.
Acquisition in this ZIP code is relatively affordable, given the median home value is $403,406. The lack of data on days on market (DOM) and the low price-cut share of 0.2% indicate that homes are selling quickly without significant price reductions, suggesting a stable market where properties maintain their value. For small-portfolio investors looking to acquire properties, this area offers a reasonable entry point with minimal risk of rapid depreciation.
Tenant demand in ZIP 96772 is moderate. With a total population of 2,470, approximately 20.0% are renters. This translates to roughly 494 potential tenants, which may be insufficient to sustain a robust rental market, especially considering the limited number of units available for rent. Landlords should be prepared to compete with other housing options and possibly offer incentives to attract tenants.
In summary, while the acquisition cost is reasonable and property values are stable, the mismatch between the FMR and actual market rents, along with the modest tenant demand, presents a challenging investment landscape. Landlords must carefully manage their properties to ensure profitability and consider diversifying their investment portfolio beyond this ZIP code to mitigate risks associated with low rental income and limited tenant pool. The area is suitable for those who can find value in long-term investments with potentially lower returns compared to the FMR targets.
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.