Location: Pickett County, TN | Metro: Fentress County, TN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $780 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $1,030 |
| 3 Bedrooms | $1,300 |
| 4 Bedrooms | $1,440 |
| 5 Bedrooms | $1,670 |
| 6 Bedrooms | $1,870 |
| 7 Bedrooms | $2,020 |
| 8 Bedrooms | $2,121 |
U.S. Census Bureau data (2024)
A skeptical investor considering ZIP 38577 might raise several valid concerns regarding the feasibility of investing in properties under the Section 8 program. Here, we address these objections with the available data.
The first objection is whether the Fair Market Rent (FMR) of $1,140 for the metro area in fiscal year 2026 will adequately cover the mortgage on a home valued at $232,161. This concern is crucial because it directly impacts the profitability of an investment. According to the data, the FMR is set to ensure that rental housing is affordable for low-income families. However, the data does not provide a breakdown of typical mortgage payments for homes priced around $232,161. To make an informed decision, an investor should calculate their expected monthly mortgage payment, including principal, interest, taxes, and insurance, and compare it to the FMR. If the mortgage exceeds $1,140 significantly, the investment might not be financially viable without additional income sources.
The second objection pertains to the level of renter demand, which stands at 2.1%. This percentage suggests a relatively low demand for rental units compared to other areas. For landlords and small-portfolio investors, this could translate into challenges in finding tenants willing to participate in the Section 8 program. The data does not offer insights into the number of applicants for Section 8 housing in ZIP 38577, nor does it detail the vacancy rates for subsidized housing. Therefore, while the 2.1% figure indicates low overall demand, the specific dynamics of the Section 8 program in this ZIP code remain unclear. Investors should conduct further research to gauge the competition for Section 8 vouchers and the likelihood of filling their units with eligible tenants.
The third objection questions whether vouchers will keep pace with the local market rents, given that the data shows a gap marked as "N/A" between voucher amounts and actual market rents. This is a significant issue since if the voucher amounts do not increase at the same rate as market rents, landlords might face financial strain. Unfortunately, the data provided does not specify the current average market rent for ZIP 38577, nor does it forecast future changes in voucher amounts. To mitigate this risk, investors should monitor HUD announcements and local housing authority policies closely. They should also consider the potential for adjusting rents to stay within allowable limits and explore ways to reduce operational costs.
In conclusion, while ZIP 38577 presents some challenges for Section 8 investments, particularly with regard to covering mortgage payments and tenant demand, the data offers a starting point for analysis. It is essential for investors to perform detailed calculations and seek out additional local market data to make a well-informed decision.
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.