Location: McMinn County, TN | Metro: Cleveland, TN MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $780 |
| 1 Bedroom | $910 |
| 2 Bedrooms | $1,110 |
| 3 Bedrooms | $1,430 |
| 4 Bedrooms | $1,470 |
| 5 Bedrooms | $1,705 |
| 6 Bedrooms | $1,910 |
| 7 Bedrooms | $2,063 |
| 8 Bedrooms | $2,166 |
U.S. Census Bureau data (2024)
The analysis of ZIP 37325 (Delano, TN) reveals a market that is neither high-yield nor particularly stable. With a Fair Market Rent (FMR) of $970 for fiscal year 2024, and an average monthly rent of $981, the rental yield potential is modest. The average home value in the area is $258,486, which is significantly lower than the $270,770 figure mentioned previously, suggesting that the market has not fully recovered or that there are other factors influencing property values.
The income level in the area is $53,750, indicating a relatively low-income demographic. This could impact the ability of residents to afford higher rents, thus affecting the stability of rental income. Additionally, the percentage of renters is 14.9%, which is lower than the 7.6% mentioned initially, pointing to a smaller rental market share.
The market trends show a 5-year Compound Annual Growth Rate (CAGR) of 6.6%, which is strong but not exceptional. However, the current vacancy rate of 18.3% is notably high, suggesting challenges in maintaining consistent occupancy. This high vacancy rate also implies a greater risk of vacancy and lower stability.
The gross yield is 4.6%, and the cap rate is 3.0%, both of which are relatively low. These figures indicate that while the market offers some appreciation potential, the rental income generated is not particularly high relative to the property value. The 5-year Internal Rate of Return (IRR) is 9.5%, which is decent but not outstanding.
In conclusion, ZIP 37325 is best classified as a steady-cashflow zone with moderate appreciation potential. However, the high vacancy rate and low cap rate suggest that it is a middle-of-the-road market with risks that must be managed carefully. Investors should focus on thorough tenant screening and robust financial planning to mitigate these risks.
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.