Location: Island County, WA | Metro: Island County, WA
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 | $1,200 |
| 1 Bedroom | $1,380 |
| 2 Bedrooms | $1,720 |
| 3 Bedrooms | $2,360 |
| 4 Bedrooms | $2,820 |
| 5 Bedrooms | $3,271 |
| 6 Bedrooms | $3,664 |
| 7 Bedrooms | $3,957 |
| 8 Bedrooms | $4,155 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,380 | $609,874 | 0.23% | F |
| 2BR | $1,720 | $727,495 | 0.24% | F |
| 3BR | $2,360 | $789,769 | 0.3% | F |
| 4BR | $2,820 | $1,096,334 | 0.26% | F |
U.S. Census Bureau data (2024)
ZIP 98249, located in Freeland, WA within the Island County metro area, presents a strategic opportunity for inclusion in a Section 8 portfolio. This ZIP code should be considered an appreciation play due to its favorable characteristics that support long-term growth potential.
The median fair market rent (FMR) for the metro area in fiscal year 2026 is set at $1,620, while the actual market rent is slightly lower at $1,566. The median home value in this ZIP is significantly higher at $741,033. This indicates that the rental market is competitive but not excessively so, suggesting a stable environment for Section 8 properties. The slight difference between the FMR and market rent ($54 spread) means that landlords can expect to receive a reasonable subsidy from the government without having to drastically undercut their asking rents.
A key indicator supporting the appreciation play classification is the low price-cut share at 0.3%. This figure suggests that properties in this ZIP code are generally priced correctly and do not require frequent adjustments to attract buyers, implying strong demand and stability in property values. Additionally, the day DOM (Days on Market) being listed as N/A often indicates a very active market where homes sell quickly, further reinforcing the idea that this ZIP code offers a solid foundation for appreciation.
The median income in ZIP 98249 is relatively high at $99,519, which suggests a robust local economy and a population that can afford higher rents and home values. This economic strength supports the notion that property values in this area are likely to appreciate over time, making it a wise choice for investors focused on long-term capital gains.
While the renter share at 16.9% is notable, it does not overshadow the other indicators pointing towards appreciation. The combination of stable rental subsidies, quick sales, and a strong local economy makes ZIP 98249 a prime candidate for an appreciation play within a Section 8 portfolio strategy. Landlords and investors can expect both steady cash flow and the potential for significant property value increases, aligning well with broader investment goals.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.