Location: Memphis, TN | Metro: Memphis, TN-MS-AR HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,090 |
| 1 Bedroom | $1,190 |
| 2 Bedrooms | $1,300 |
| 3 Bedrooms | $1,720 |
| 4 Bedrooms | $1,980 |
| 5 Bedrooms | $2,297 |
| 6 Bedrooms | $2,573 |
| 7 Bedrooms | $2,779 |
| 8 Bedrooms | $2,918 |
The potential risks for investing in Section 8 properties in ZIP code 38124 in Unknown, TN, are significant and should be carefully considered. First, tenant turnover could pose a challenge, especially when comparing the market rent to the Fair Market Rent (FMR) of $1300 for fiscal year 2024. The absence of specific data on market rent makes it difficult to gauge how competitive the FMR is, which could lead to higher turnover rates if tenants find better deals elsewhere.
Vacancy exposure is another critical concern. With no data available on the days on market (DOM), it's unclear how quickly rental units in this area can be filled. High vacancy rates can significantly impact cash flow and overall profitability, making this an important factor to monitor closely.
Deferred maintenance is also a risk, particularly due to the lack of specific data on typical home values and median incomes in ZIP 38124. Without these figures, it's challenging to assess the financial capacity of landlords to maintain their properties adequately. Poor maintenance can lead to increased repair costs and potential health and safety issues for tenants, which can further complicate the investment.
However, these risks must be weighed against the high density of renters in the area. While the exact percentage of the renter share is not provided, a high renter density typically indicates strong demand for housing, including Section 8 vouchers. This demand can help mitigate some of the risks associated with vacancy and turnover.
In conclusion, based on the available data, the risk for a first-time Section 8 landlord in ZIP code 38124 is moderate. The lack of specific financial metrics such as market rent, DOM, home values, and median income introduces uncertainty, but the potential for a high renter share provides a buffer against some of these risks.
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.