Location: Gibson County, TN | Metro: Gibson County, TN HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $690 |
| 1 Bedroom | $760 |
| 2 Bedrooms | $1,000 |
| 3 Bedrooms | $1,380 |
| 4 Bedrooms | $1,570 |
| 5 Bedrooms | $1,821 |
| 6 Bedrooms | $2,040 |
| 7 Bedrooms | $2,203 |
| 8 Bedrooms | $2,313 |
U.S. Census Bureau data (2024)
A skeptical investor considering ZIP 38369 might have several concerns regarding the viability of investing in rental properties through the Section 8 program. Let's address these specific objections using available data.
Objection 1: Will Fair Market Rent (FMR) of $860 cover the mortgage on a $142,413 home?
The Fair Market Rent (FMR) for ZIP 38369 in fiscal year 2024 is set at $860. To determine if this will sufficiently cover the mortgage on a $142,413 home, we need to consider the typical mortgage rates and terms. Assuming a 30-year fixed-rate mortgage with an interest rate of 5%, the monthly mortgage payment would be approximately $730. This means that the FMR of $860 would indeed cover the mortgage payment, leaving a surplus of $130 per month. However, this does not account for property taxes, insurance, maintenance, and other expenses, which could eat into that surplus.
Objection 2: Is there enough renter demand at 17.4%?
The percentage of renters in ZIP 38369 stands at 17.4%. While this figure indicates a smaller proportion of renters compared to many urban areas, it still represents a significant number of potential tenants. The challenge lies in understanding whether this percentage translates into a robust demand for Section 8 rentals. Given the limited data provided, it is difficult to conclusively state the level of demand; however, it is important to note that the actual number of renters must be considered alongside the vacancy rate and the competition from other rental units in the area.
Objection 3: Will vouchers keep pace with $691 market rents?
The average market rent in ZIP 38369 is $691, which is below the FMR of $860. While this suggests that vouchers can potentially cover the market rent, it is crucial to monitor how the voucher amounts adjust over time relative to the cost of living and housing prices. If the voucher amount does not increase at the same rate as market rents, landlords might find themselves subsidizing the difference. Therefore, investors should keep a close eye on future adjustments to both voucher amounts and market rents to ensure long-term financial stability.
In summary, while the FMR of $860 can cover the mortgage on a $142,413 home, other factors such as property taxes and maintenance costs must be accounted for. The 17.4% renter rate provides a base for tenant demand, but further investigation into the local rental market dynamics is necessary. Lastly, although vouchers currently meet or exceed market rents, continuous monitoring of their adjustment rates is essential to maintain profitability.
Data Sources: FMR data from HUD (2027). 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.