Location: Chattanooga, 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 | $1,320 |
| 1 Bedroom | $1,380 |
| 2 Bedrooms | $1,500 |
| 3 Bedrooms | $1,860 |
| 4 Bedrooms | $1,970 |
| 5 Bedrooms | $2,285 |
| 6 Bedrooms | $2,559 |
| 7 Bedrooms | $2,764 |
| 8 Bedrooms | $2,902 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,500 | $257,443 | 0.58% | F |
| 3BR | $1,860 | $344,280 | 0.54% | F |
| 4BR | $1,970 | $445,457 | 0.44% | F |
| 5BR | $2,285 | $740,113 | 0.31% | F |
U.S. Census Bureau data (2024)
Red Bank, TN, with a population of 24,181, is a residential area where nearly half of its residents—42.5%—are renters. The median household income stands at $70,972, indicating a moderate economic base. Median home values in the area are relatively high at $330,285, suggesting a mix of affordable and higher-end housing options.
The rental market in ZIP code 37415 reflects a competitive environment. The Fair Market Rent (FMR) for the fiscal year 2024 is set at $1390, which closely aligns with the actual market rent of $1,389 as indicated by ZORI (Zillow Observed Rent Index). This parity between FMR and market rent signals that the rental market is well-regulated and likely to provide stable returns for investors.
Given these conditions, ZIP 37415 is suitable for both hands-off voucher operators and hands-on value-add buyers. For hands-off operators, the stability of the rental market and the alignment between FMR and market rents mean that properties can reliably attract tenants through the Section 8 program without significant risk. On the other hand, for value-add buyers looking to improve property values and rents, the slightly lower market rent compared to FMR leaves room for modest increases in rental prices, potentially enhancing profitability over time.
In conclusion, the demographics and economic indicators of Red Bank, TN, suggest a balanced investment opportunity. With a strong rental component and median incomes that support moderate to higher-end housing, the area presents a viable option for Section 8 investments. Whether an investor chooses a passive or active approach, the fundamentals of ZIP 37415 support a positive outlook for rental properties.
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.