Location: Knoxville, TN | Metro: Knoxville, TN HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,220 |
| 1 Bedroom | $1,230 |
| 2 Bedrooms | $1,540 |
| 3 Bedrooms | $1,930 |
| 4 Bedrooms | $2,220 |
| 5 Bedrooms | $2,575 |
| 6 Bedrooms | $2,884 |
| 7 Bedrooms | $3,115 |
| 8 Bedrooms | $3,271 |
The analysis of the Section 8 cap-rate picture for ZIP code 37929 reveals several key points that landlords and small-portfolio investors should consider. The Fair Market Rent (FMR) for a two-bedroom apartment in fiscal year 2024 is set at $1280 per month. To annualize this figure, we multiply it by 12, yielding an annual rental income of $15,360 for a two-bedroom property under the Section 8 program.
Market rent data is currently unavailable for ZIP code 37929, which makes direct comparisons challenging. However, if we assume the median home value is also unavailable, we can still provide a general framework for understanding the potential gross yield under both scenarios.
In the case of Section 8 participation, the gross yield would be based on the annualized FMR of $15,360. This figure represents the total rental income a landlord could expect from a two-bedroom unit without factoring in vacancy rates or other costs. For a market rent scenario, the absence of specific data means we cannot calculate a precise gross yield, but we can infer that the actual market rate might offer higher potential returns compared to the fixed FMR.
Given the current situation where the renter density is unknown and the days on market (DOM) is also not specified, it's difficult to determine which scenario is more realistic. However, it's important to note that while the Section 8 program offers guaranteed income through government subsidies, it comes with strict regulations and oversight. On the other hand, market rents are subject to fluctuations based on supply and demand dynamics, but they can potentially exceed the FMR if the local rental market is strong.
To conclude, the gross yield from a Section 8 two-bedroom property in ZIP 37929 would be $15,360 annually. While this provides a stable income stream, the lack of specific market rent data prevents a direct comparison. Investors must weigh the benefits of guaranteed income against the potential for higher returns in a robust rental market.
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.