Location: Grundy County, TN | Metro: Grundy County, TN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $850 |
| 1 Bedroom | $870 |
| 2 Bedrooms | $1,120 |
| 3 Bedrooms | $1,350 |
| 4 Bedrooms | $1,500 |
| 5 Bedrooms | $1,740 |
| 6 Bedrooms | $1,949 |
| 7 Bedrooms | $2,105 |
| 8 Bedrooms | $2,210 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP code 37305 reveals two distinct possibilities based on the available data.
First, considering the Federal Market Rent (FMR) for a 2-bedroom unit at $980 per month for fiscal year 2026, the annualized income would be $11,760. Given the median home value of $156,131, this translates to an implied gross yield of approximately 7.5%. This calculation assumes that the property being analyzed is a single-family home or similar unit eligible for the Section 8 program.
Second, if we were to consider the market rent, which is currently not available, we would need to make assumptions based on typical market conditions. However, since no specific market rent figure is provided, we cannot calculate a precise gross yield for this scenario. It is important to note that market rents often exceed the FMR rates, potentially leading to higher gross yields under normal circumstances.
The renter density in ZIP 37305 stands at 4.2%, indicating a relatively low proportion of renters compared to homeowners. This statistic suggests that the demand for rental properties, including those in the Section 8 program, might be limited. Additionally, the lack of data regarding the Days on Market (DOM) makes it difficult to gauge how quickly a Section 8 property might be leased in this area.
Given these factors, the first scenario using the FMR rate of $980 per month appears more realistic. The implied gross yield of 7.5% provides a concrete basis for investment decisions, especially when considering the low renter density and the potential challenges in finding tenants willing to participate in the Section 8 program. Landlords and small-portfolio investors should use this yield as a starting point for their own calculations, taking into account local market dynamics and the specific terms of the Section 8 program.
Data Sources: FMR data from HUD (2027). 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.