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 |
Skeptical investors considering ZIP 38168 in Tennessee often raise several key concerns that need addressing before committing to a property investment under the Section 8 program. The first objection is whether the Fair Market Rent (FMR) of $1300, which is the figure for the zip code for fiscal year 2024, will sufficiently cover the mortgage on a new home. While the exact mortgage amount isn't provided, it's crucial to note that the FMR is set to ensure that landlords receive a competitive rate that covers their costs including mortgage payments. However, without knowing the specific mortgage amount for a home in this area, we cannot definitively state if it will cover the mortgage. Landlords should calculate their expected monthly mortgage payments to determine if they align with the FMR.
The second concern revolves around the demand for rental properties at this price point. The data indicates that the vacancy rate in ZIP 38168 is N/A%, suggesting that the market is either very tight or that there's a significant demand for affordable housing. In areas with high demand and low vacancy rates, the FMR can serve as a benchmark to attract tenants. If the vacancy rate were higher, it might indicate a risk of not filling units. Since the vacancy rate is unknown, it's important for investors to research local market conditions and trends to assess the likelihood of finding tenants willing to pay the FMR.
A final objection is whether the voucher program will keep up with market rents. The FMR of $1300 is designed to reflect what is considered fair and reasonable for the area. However, the ability of voucher programs to adjust to market changes depends on federal funding and policy decisions. Historically, voucher amounts have lagged behind market rents in many areas, but the FMR provides a clear guideline for what the government considers appropriate. It's advisable to monitor the local housing authority's policies and any announcements regarding adjustments to voucher amounts to ensure they remain aligned with the FMR.
In conclusion, while some data points are missing, such as the specific mortgage amount and the exact vacancy rate, the FMR of $1300 offers a solid foundation for landlords and small-portfolio investors looking to participate in the Section 8 program in ZIP 38168. Careful analysis of local market conditions and ongoing monitoring of voucher policies will be essential to make informed decisions and manage risks effectively.
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.