Location: Lauderdale County, TN | Metro: Lauderdale County, TN
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 | $760 |
| 1 Bedroom | $760 |
| 2 Bedrooms | $1,000 |
| 3 Bedrooms | $1,290 |
| 4 Bedrooms | $1,530 |
| 5 Bedrooms | $1,775 |
| 6 Bedrooms | $1,988 |
| 7 Bedrooms | $2,147 |
| 8 Bedrooms | $2,254 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,290 | $159,421 | 0.81% | C |
U.S. Census Bureau data (2024)
The Section 8 market analysis for ZIP code 38041 in Lauderdale County, Tennessee, reveals a favorable environment for investors. The HUD Fair Market Rent (FMR) for the area is set at $930 for fiscal year 2026, which is significantly higher than the average market rent of $723 based on Census ACS data. This means that voucher tenants can generally cashflow at the HUD FMR, making this area attractive for those looking to secure long-term rental income.
To further analyze the investment potential, consider the median home value of $111,904. Using this figure, we can derive a rent-to-price ratio. With an average market rent of $723, the annual rent would be approximately $8,676. Dividing this by the median home value gives us a rent-to-price ratio of roughly 7.7%, indicating that rental properties in this area offer a decent return relative to property values.
In terms of the days on market (DOM) and the percentage of price cuts, the data shows these metrics as N/A, suggesting that there might not be significant fluctuations in property prices or prolonged periods of unsold inventory. This implies that the local real estate market is relatively stable, which could be beneficial for both rental and resale strategies.
The strongest investor angle in ZIP 38041 is likely cashflow. Given the disparity between the HUD FMR and the actual market rents, landlords can expect to cover their costs and generate profit with Section 8 tenants without needing to rely on premium units. This makes it an excellent choice for those prioritizing steady, reliable returns over speculative growth or rapid appreciation.
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.