Location: Greene County, TN | Metro: Johnson City, TN 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 | $840 |
| 2 Bedrooms | $1,070 |
| 3 Bedrooms | $1,320 |
| 4 Bedrooms | $1,440 |
| 5 Bedrooms | $1,670 |
| 6 Bedrooms | $1,870 |
| 7 Bedrooms | $2,020 |
| 8 Bedrooms | $2,121 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,320 | $324,746 | 0.41% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 37681 reveals some interesting insights into potential investment opportunities. Using the Fair Market Rent (FMR) for a 2-bedroom apartment set at $890 annually for fiscal year 2024, the implied gross yield can be calculated. Given the median home value of $294,094, the annualized FMR of $890 translates to an implied gross yield of approximately 0.30%. This calculation is derived by dividing the annual FMR by the median home value.
On the other hand, using the market rent figure of $767 per month (from Census ACS), the annualized market rent amounts to $9,204. When this amount is divided by the median home value, it results in an implied gross yield of about 3.13%. This higher yield reflects the difference between the subsidized rental rates under Section 8 and the prevailing market rates.
The more realistic scenario depends on several factors, including the likelihood of securing tenants willing to pay market rates and the availability of Section 8 vouchers. With a renter density of 12.8%, it's evident that a significant portion of the population in ZIP 37681 relies on rental housing. However, the limited data on days on market (DOM) makes it challenging to predict how quickly properties might be leased at either rate.
Considering the lower renter density, landlords and small-portfolio investors should lean towards the market rent scenario for a more sustainable and profitable investment. The 3.13% gross yield from market rents provides a clearer indication of the property's earning potential without relying on government subsidies. While Section 8 can offer stability, the 0.30% gross yield is significantly lower and may not justify the time and effort required to manage such properties.
In conclusion, although both figures provide useful information, the market rent scenario offers a more practical and higher gross yield for investment purposes. Investors should weigh the benefits of Section 8 stability against the reduced income and consider the local rental market dynamics before making any decisions.
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.