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 | $1,010 |
| 1 Bedroom | $1,130 |
| 2 Bedrooms | $1,310 |
| 3 Bedrooms | $1,710 |
| 4 Bedrooms | $1,720 |
| 5 Bedrooms | $1,995 |
| 6 Bedrooms | $2,234 |
| 7 Bedrooms | $2,413 |
| 8 Bedrooms | $2,534 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,710 | $540,088 | 0.32% | F |
| 4BR | $1,720 | $902,672 | 0.19% | F |
U.S. Census Bureau data (2024)
The analysis of ZIP code 37885 reveals a moderate balance between yield potential and market stability, making it neither a high-yield/low-stability flip-style market nor a purely steady-cashflow zone. The Federal Market Rent (FMR) for the fiscal year 2024 is set at $1,050, which is notably higher than the local market rent of $911. This discrepancy suggests that there is room for rental price increases, potentially leading to higher yields if landlords can leverage the FMR effectively.
However, the median home value in ZIP 37885 stands at $480,372, indicating a relatively high investment cost for property acquisition. Given this figure, achieving high yields through short-term flips might be challenging due to the substantial capital required and the time needed to recoup costs through rental income.
In terms of stability, the ZIP code has a significant portion of renters, with 24.0% of residents being tenants. While this percentage is not exceptionally high, it does provide a stable demand for rental properties. Unfortunately, the data lacks information on the number of days on market (DOM), which would have been useful in assessing the speed at which properties can be rented out. Additionally, the average household income in the area is $78,793, providing a reasonable financial base for tenants to afford rents closer to the FMR without defaulting.
To summarize, ZIP 37885 offers a decent yield opportunity with a potential for rental price increases above the current market rate. However, the high median home value and limited data on market dynamics suggest a middle-ground scenario where the focus should be on steady cash flow rather than rapid profit flipping. Landlords and small-portfolio investors should consider these factors carefully when evaluating the risk and return profile of this market.
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.