Section 8 Fair Market Rent (FMR) for ZIP 38188 - 2027

FY 2027 Fair Market Rent Rates

To decide whether you should buy in ZIP code 38188 for Section 8 investments, follow this decision tree:

• Does the Fair Market Rent (FMR) of $1300 cover the debt service on a property?
  • If yes: Proceed to the next question. The FMR indicates that properties can potentially generate sufficient income to meet mortgage obligations.
  • If no: Do not invest in this area. The FMR is too low to ensure that rental income will cover your debt service costs.
• Is the market rent above, at, or below the FMR of $1300?
  • If above: This suggests strong rental demand and higher potential returns. Continue to the next step.
  • If at: The market is aligned with the FMR, indicating stable but not exceptionally high rental demand. Consider further analysis before making a decision.
  • If below: Rental rates are lower than the FMR, which could indicate weaker demand or oversupply. It would be risky to invest without additional favorable factors.
• Are the percentage of renters and the days on market (DOM) indicative of enough demand?
  • If the percentage of renters is high and DOM is low: There is strong demand for rental properties in this area. Investing here could be profitable.
  • If the percentage of renters is moderate and DOM is moderate: Demand is stable but not exceptional. Investment here would depend on other financial metrics and personal risk tolerance.
  • If the percentage of renters is low and DOM is high: There is weak demand for rentals. This makes investment less attractive unless there are significant compensating factors.

The final decision to invest in ZIP 38188 for Section 8 properties hinges on these three points. Without specific data on local rental rates and market conditions, the decision remains uncertain. However, if the FMR covers debt service, market rents are above the FMR, and there is strong rental demand with low DOM, then the answer is yes, you should consider buying here.

If any of these criteria are not met, the decision shifts to either no or it depends, based on how many of the criteria fail and what the nature of those failures are. For instance, if only the market rent is slightly below the FMR but the demand is strong, it might still be worth considering.

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.