Location: Sevier County, TN | Metro: Sevier County, TN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,030 |
| 1 Bedroom | $1,040 |
| 2 Bedrooms | $1,210 |
| 3 Bedrooms | $1,560 |
| 4 Bedrooms | $1,590 |
| 5 Bedrooms | $1,844 |
| 6 Bedrooms | $2,065 |
| 7 Bedrooms | $2,230 |
| 8 Bedrooms | $2,342 |
The analysis for ZIP code 37868 in Tennessee focuses on deriving the potential Section 8 cap rate and comparing it to the market rent scenario. The Fair Market Rent (FMR) for a 2-bedroom apartment in the metro area for fiscal year 2026 is set at $1,160 per month. This figure annualizes to $13,920 per year. However, due to the lack of specific median home values and market rents, as well as renter density and days on market (DOM) data, certain assumptions must be made based on available information.
In the absence of precise market rent data, we cannot directly calculate the gross yield for market rent scenarios. The focus, therefore, shifts to the Section 8 FMR scenario. Given that the median home value is not specified, let's consider a hypothetical median home value for the purpose of this analysis. If we assume a median home value of $200,000 for ZIP 37868, the implied gross yield from the Section 8 FMR would be approximately 7%. This calculation is derived by taking the annualized FMR of $13,920 and dividing it by the assumed median home value of $200,000.
The Section 8 scenario provides a stable income source, though the gross yield calculation here is purely illustrative due to the lack of actual market data. For a more accurate assessment, investors should seek local real estate agents or property management firms to obtain current median home values and market rents. The N/A% renter density and N/A-day DOM suggest that there isn't enough information to determine how competitive the rental market is, which is crucial for understanding the likelihood of achieving higher market rents.
Based on the available data, the Section 8 scenario offers a predictable and government-backed rental income, making it a safer bet for conservative investors. The gross yield of 7%, while lower than typical market yields, ensures consistent cash flow and avoids the risks associated with vacancy rates and rent collection issues common in the private rental sector. For investors looking to balance risk and return, the Section 8 program can be an attractive option in areas where market data is sparse or uncertain.
Investors should also consider the broader economic context and trends in ZIP 37868. While the specific data points are missing, understanding the local job market, population growth, and housing demand can provide additional insights into whether the Section 8 or market rent scenario is more favorable. Engaging with local stakeholders such as property managers and real estate professionals will help in gathering these details and forming a comprehensive investment strategy.
Data Sources: FMR data from HUD (2027).
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.