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 for ZIP code 37998 in Tennessee reveals incomplete data, making it challenging to provide a precise Section 8 cap-rate picture. However, we can still outline some key points based on the available information.
The Fair Market Rent (FMR) for a two-bedroom apartment in ZIP 37998 for fiscal year 2024 is set at $1280 per month. This figure represents the annualized rental income potential for a property participating in the Section 8 program. Given that the median home value in this area is not available, we cannot directly calculate the gross yield for properties under the Section 8 program. The lack of market rent data also prevents us from comparing the gross yields between Section 8 and market rents.
To illustrate the implications, let's assume a median home value for the sake of argument. If we hypothetically assign a median home value of $256,000 to ZIP 37998, the annualized FMR of $15,360 ($1280 * 12 months) would suggest a gross yield of approximately 6%. This calculation assumes that the property is valued at the median home value and rented out at the FMR rate.
However, the actual gross yield could vary depending on the specific property value and the prevailing market conditions. Without the market rent data, we cannot determine if the gross yield from renting at market rates would be higher or lower than the 6% derived from the Section 8 program. The absence of renter density and days on market (DOM) data further complicates the assessment, as these metrics would help gauge the demand for rental properties and the competitiveness of the local market.
In conclusion, while the hypothetical gross yield from the Section 8 program is around 6%, the lack of comprehensive data makes it difficult to assess the realism of this scenario compared to market rents. Landlords and small-portfolio investors should proceed with caution and seek additional local insights to make informed decisions.
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.