Location: Knoxville, TN | Metro: Knoxville, 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 | $1,090 |
| 1 Bedroom | $1,090 |
| 2 Bedrooms | $1,370 |
| 3 Bedrooms | $1,710 |
| 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 | $1,370 | $247,875 | 0.55% | F |
| 3BR | $1,710 | $362,051 | 0.47% | F |
| 4BR | $1,970 | $440,235 | 0.45% | F |
| 5BR | $2,285 | $558,303 | 0.41% | F |
U.S. Census Bureau data (2024)
Powell, TN, located in ZIP code 37849, is a middle-class suburban area with a total population of 29,375. The neighborhood is predominantly owner-occupied, with only 17.6% of residents being renters. This indicates a community where homeownership is highly valued, with a median household income of $84,275 supporting this trend. The median home value in the area stands at $358,823, reflecting the economic status of the residents and the overall stability of the housing market.
Turning to the rent economics, the Fair Market Rent (FMR) for ZIP code 37849 as of the fiscal year 2024 is set at $1,170. In contrast, the market rent, measured by the Zillow Observed Rental Index (ZORI), is significantly higher at $1,987. This disparity highlights the potential financial benefits for landlords who can attract Section 8 tenants while charging closer to the market rate.
Given these factors, ZIP code 37849 in Powell, TN, is well-suited for both hands-off voucher operators and hands-on value-add buyers. For hands-off operators, the area's stable income levels and relatively low percentage of renters suggest a reliable pool of Section 8 tenants who can afford the rent. Meanwhile, hands-on value-add buyers can leverage the gap between FMR and market rent to increase their investment returns by improving properties to command higher rents.
The combination of a moderate-income suburb with a high median home value and a significant difference between FMR and market rent presents an attractive opportunity for Section 8 investors. Whether focusing on passive income or active property management, the fundamentals of ZIP 37849 support successful rental operations.
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.