Location: Rhea County, TN | Metro: Chattanooga, TN-GA MSA
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 | $810 |
| 1 Bedroom | $830 |
| 2 Bedrooms | $1,020 |
| 3 Bedrooms | $1,230 |
| 4 Bedrooms | $1,370 |
| 5 Bedrooms | $1,589 |
| 6 Bedrooms | $1,780 |
| 7 Bedrooms | $1,922 |
| 8 Bedrooms | $2,018 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,230 | $306,898 | 0.4% | F |
U.S. Census Bureau data (2024)
The analysis of ZIP 37338, located in Rhea County, TN, reveals several key insights for landlords and small-portfolio investors.
The rent math does not work favorably for landlords. The Fair Market Rent (FMR) for FY 2024 is set at $1040, which is significantly higher than the actual market rent reported by the Census ACS at $733. This discrepancy suggests that landlords may struggle to charge the FMR without facing vacancy issues.
Acquisition appears to be affordable in this area, with a median home value of $256,027. However, the lack of data on days-on-market (DOM) and the percentage of homes with price cuts indicates that there might be some uncertainty regarding the ease of acquiring properties. Without these metrics, it's challenging to assess the competitiveness of the housing market and how quickly properties sell.
Tenant demand is moderate. With a population of 3,309, the renter share stands at 22.3%, indicating a steady but not overwhelming demand for rental properties. This share translates to approximately 737 renters in the area, providing a reasonable pool of potential tenants.
Verdict: While the acquisition cost is relatively low at $256,027 for a median-priced home, the unfavorable rent math and moderate tenant demand make ZIP 37338 a less attractive investment opportunity. Landlords should consider adjusting their rental pricing strategies to align more closely with the market rent of $733 to avoid prolonged vacancies. Additionally, the limited data on DOM and price-cut percentages suggest that further due diligence is necessary to fully understand the local real estate dynamics before making any investment decisions.
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.