Location: Monroe County, 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 | $770 |
| 1 Bedroom | $870 |
| 2 Bedrooms | $1,000 |
| 3 Bedrooms | $1,290 |
| 4 Bedrooms | $1,350 |
| 5 Bedrooms | $1,566 |
| 6 Bedrooms | $1,754 |
| 7 Bedrooms | $1,894 |
| 8 Bedrooms | $1,989 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,000 | $216,738 | 0.46% | F |
| 3BR | $1,290 | $289,313 | 0.45% | F |
| 4BR | $1,350 | $356,712 | 0.38% | F |
U.S. Census Bureau data (2024)
Sweetwater, Tennessee, represented by ZIP code 37874, presents an interesting scenario for real estate investment. The Fair Market Rent (FMR) for the fiscal year 2024 is set at $1050, which is significantly higher than the current market rent of $625. This indicates a potential opportunity for landlords to increase rental rates, thus enhancing the yield on their investments. However, the median home value of $257,570 suggests that purchasing property in this area will come at a relatively high cost compared to the rental income generated.
The stability of the market can be assessed through several factors. First, the percentage of renters is 32.7%, which is a moderate figure indicating that while there is a reasonable demand for rentals, it's not overwhelming. Second, the days on market (DOM) for properties stands at 50 days, which is average and implies that properties are neither selling too quickly nor taking an unusually long time to find tenants. Lastly, the median household income of $53,605 provides insight into the financial capacity of potential renters, suggesting a stable but not robust income level that could support higher rents.
Given these metrics, Sweetwater, TN, does not fall squarely into either a high-yield/low-stability flip-style market or a steady-cashflow zone. Instead, it represents a balance between the two. The high FMR compared to the current market rent indicates a potential for increased cash flow if rental prices can be raised closer to the FMR without deterring tenants. The moderate renter population and typical DOM suggest a stable environment where finding tenants should not be overly challenging. However, the median income figure cautions against setting rents too high, as it may limit the pool of qualified tenants.
In conclusion, Sweetwater, TN, offers a medium-risk, medium-reward scenario for real estate investors. Landlords can expect to see improved yields by adjusting rental prices towards the FMR, while the stability factors indicate a reliable tenant base and reasonable property turnover times. Investors should proceed with a strategic approach, carefully considering the balance between increasing rental income and maintaining affordability for local residents.
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.