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 | $1,750 |
| 1 Bedroom | $1,770 |
| 2 Bedrooms | $2,210 |
| 3 Bedrooms | $2,760 |
| 4 Bedrooms | $3,180 |
| 5 Bedrooms | $3,689 |
| 6 Bedrooms | $4,132 |
| 7 Bedrooms | $4,463 |
| 8 Bedrooms | $4,686 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,210 | $347,037 | 0.64% | D |
| 3BR | $2,760 | $490,004 | 0.56% | F |
| 4BR | $3,180 | $726,184 | 0.44% | F |
| 5BR | $3,689 | $925,679 | 0.4% | F |
U.S. Census Bureau data (2024)
The ZIP code 37934, located in Farragut, TN, within the Knoxville, TN HUD Metro FMR Area, offers a strategic opportunity for landlords and small-portfolio investors when considering a Section 8 portfolio strategy. This area stands out as an appreciation play due to several key factors.
Firstly, the financial metrics suggest that while the Fair Market Rent (FMR) for ZIP 37934 in fiscal year 2024 is set at $1830, the market rent is higher at $2,188. This indicates a healthy margin above the FMR, which can be beneficial for landlords participating in the Section 8 program. The difference between the FMR and market rent suggests potential for rental increases as the market continues to evolve, providing a path for appreciation.
Secondly, the low price-cut share of 0.2% and a relatively short Days on Market (DOM) of 36 days indicate a strong demand for rental properties in this area. Properties do not typically require significant discounts to attract tenants, and they move quickly once listed. This high demand and low need for price adjustments support the appreciation play thesis, as it suggests that property values and rental rates are likely to increase over time.
While the median home value of $648,226 might seem high, it does not necessarily detract from the appreciation potential. Instead, it reflects the overall wealth of the area, which can contribute to steady demand and property value growth. Additionally, the median income of $132,264 further supports the idea that this area has a robust economic base, capable of sustaining rising property values and rents.
The 14.1% renter share also plays a role in this appreciation strategy. Although Farragut, TN, has a smaller percentage of renters compared to some other areas, the high median income and strong demand for rentals make it an attractive market. Landlords can expect to see their properties occupied with minimal vacancy periods, contributing to stable cash flow and appreciation opportunities.
In conclusion, ZIP 37934 is best suited as an appreciation play within a Section 8 portfolio strategy. The combination of a healthy margin above the FMR, low price-cut share, quick DOM, and high median income all point towards a market poised for growth, making it an excellent choice for investors looking to build long-term equity and value in their portfolios.
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.