Location: Overton County, TN | Metro: Clay 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 | $1,360 |
| 4 Bedrooms | $1,360 |
| 5 Bedrooms | $1,578 |
| 6 Bedrooms | $1,767 |
| 7 Bedrooms | $1,908 |
| 8 Bedrooms | $2,003 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,360 | $262,493 | 0.52% | F |
U.S. Census Bureau data (2024)
The analysis of ZIP code 38551 reveals a unique balance between yield potential and market stability. The Federal Market Rent (FMR) for the metro area in fiscal year 2026 is set at $930, while the actual market rent in the same period is estimated at $544. This indicates that the rental market in this area is below the federal guideline, suggesting a lower-cost region but also hinting at potential underutilization of rental properties.
The median home value in ZIP 38551 stands at $200,700, which is significantly lower than what might be expected in areas with higher market rents. However, the relatively low rent-to-value ratio can still provide attractive yields when considering the total investment cost. For instance, a property valued at $200,700 generating $544 per month in rent equates to an annual rent of $6,528, or approximately 3.25% of the home's value. This figure is crucial for understanding the immediate cash flow potential from rental income.
Moving to stability indicators, 38551 has a 36.5% rate of renters, which suggests a moderate reliance on rental housing. While this percentage is not exceptionally high, it does indicate a stable demand for rental units. The lack of data on days-on-market (DOM) makes it difficult to assess how quickly properties can be rented out once they become available. However, the median household income of $39,821 provides insight into the economic conditions of the area, indicating that tenants may have limited disposable income, which could affect their ability to pay higher rents.
Based on these figures, ZIP 38551 leans towards being a steady-cashflow zone rather than a high-yield/low-stability market. The moderate renter population and median income suggest a stable demand for rental housing, albeit at a lower price point. The yield, while not extraordinarily high, remains consistent and predictable, making it suitable for investors seeking reliable returns over time. The lower home values and market rents do not support a flip-style market approach, where quick sales and capital appreciation are key strategies.
To summarize, the combination of a moderate renter population, a clear disparity between FMR and actual market rent, and a reasonable median home value points to a market that offers steady, though modest, cash flow opportunities. Investors should focus on properties that can be managed efficiently to maximize returns given the economic context of the area.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.