Location: Sevier County, TN | Metro: Morristown, TN HUD Metro FMR Area
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 | $900 |
| 1 Bedroom | $900 |
| 2 Bedrooms | $1,140 |
| 3 Bedrooms | $1,390 |
| 4 Bedrooms | $1,820 |
| 5 Bedrooms | $2,111 |
| 6 Bedrooms | $2,364 |
| 7 Bedrooms | $2,553 |
| 8 Bedrooms | $2,681 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,390 | $341,112 | 0.41% | F |
U.S. Census Bureau data (2024)
The analysis of ZIP code 37820 reveals a unique balance between yield and stability that is worth considering for both landlords and small-portfolio investors. The Federal Market Rent (FMR) for the fiscal year 2024 is projected at $860, while the market rent stands slightly higher at $906. This indicates a relatively modest premium over the FMR, suggesting that the area does not offer extremely high yields compared to the cost of Section 8 housing vouchers.
However, when juxtaposed with the median home value of $317,514, the rental income becomes more attractive. A property valued at this level could potentially generate a cash-on-cash return of approximately 28% based on the FMR and around 30% based on market rents. These figures highlight the strong yield potential of this ZIP code for investors looking to maximize their returns through rental income.
On the stability axis, the ZIP code shows mixed indicators. The percentage of renters at 17.4% suggests a smaller pool of potential tenants who might rely on Section 8 vouchers, which can be a double-edged sword. While it ensures a steady stream of qualified applicants, the lower percentage also implies less demand from the broader rental market. Additionally, the median household income of $66,616 provides insight into the financial health of the residents, indicating that they have the means to afford rent but might prefer homeownership given the median home value.
The absence of data on days on market (DOM) makes it challenging to fully assess tenant turnover rates, which is a key component of stability. However, the combination of a moderate rental premium and a decent income level suggests that while this is not a high-yield/low-stability flip-style market, it leans more towards being a steady-cashflow zone. Investors should expect consistent returns without the volatility often seen in areas with very high tenant turnover.
In conclusion, ZIP 37820 offers a compelling opportunity for investors seeking a stable, albeit not extraordinarily high, yield. With a projected FMR of $860 and market rent of $906, the potential returns are solid, especially when considering the median home value. The moderate renter population and median income support a steady flow of tenants capable of meeting their obligations, making this ZIP code a reliable choice for those prioritizing long-term, low-risk investments.
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.