Location: Overton County, TN | Metro: Fentress 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 | $750 |
| 1 Bedroom | $780 |
| 2 Bedrooms | $1,000 |
| 3 Bedrooms | $1,310 |
| 4 Bedrooms | $1,400 |
| 5 Bedrooms | $1,624 |
| 6 Bedrooms | $1,819 |
| 7 Bedrooms | $1,965 |
| 8 Bedrooms | $2,063 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,310 | $302,066 | 0.43% | F |
U.S. Census Bureau data (2024)
The analysis of ZIP code 38553 reveals a unique balance between yield and stability, making it an intriguing market for real estate investment. With a Fair Market Rent (FMR) of $930 for the fiscal year 2026, this figure represents the rental income potential for Section 8 properties in the area. The FMR is notably higher than the non-existent market rent data, suggesting a strong reliance on subsidized housing in the region. This dependency on Section 8 subsidies significantly boosts the yield potential, especially given the average home value stands at $273,402. The yield calculation here would be based on the rental income received through the FMR compared to the cost of property acquisition or mortgage payments.
On the stability axis, the numbers paint a picture of a less dynamic market. Only 10.3% of the residents are renters, indicating a lower demand for rental properties overall. The lack of data on days on market (DOM) suggests limited turnover in the rental market, which can be interpreted as either a stable or stagnant rental environment. Additionally, the median household income of $63,500 is relatively low, which might affect the ability of tenants to maintain consistent rental payments without government assistance. However, the high proportion of subsidized housing provides a level of financial security that mitigates some risk associated with lower incomes.
Considering these factors, ZIP 38553 leans towards being a steady-cashflow zone. The reliance on Section 8 subsidies ensures a reliable source of rental income, albeit with the conditions and regulations that come with such programs. The low percentage of renters and limited market dynamics suggest that while the market is not highly volatile, it also does not offer the rapid appreciation or high turnover rates characteristic of a high-yield/low-stability flip-style market. Investors should focus on the long-term benefits of stable rental income rather than short-term gains.
To summarize, the key figures driving this classification are the $930 FMR, which supports a solid yield from Section 8 properties, and the 10.3% renter population coupled with the $63,500 median income, which indicate a stable but modest rental market. These elements collectively point to a niche for investors seeking consistent returns over time, rather than quick flips or speculative investments.
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.