Location: Memphis, TN | Metro: Memphis, TN-MS-AR HUD Metro FMR Area
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 | $1,220 |
| 1 Bedroom | $1,330 |
| 2 Bedrooms | $1,450 |
| 3 Bedrooms | $1,910 |
| 4 Bedrooms | $2,210 |
| 5 Bedrooms | $2,564 |
| 6 Bedrooms | $2,872 |
| 7 Bedrooms | $3,102 |
| 8 Bedrooms | $3,257 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,450 | $189,882 | 0.76% | D |
| 3BR | $1,910 | $228,945 | 0.83% | C |
| 4BR | $2,210 | $288,471 | 0.77% | D |
| 5BR | $2,564 | $396,204 | 0.65% | D |
U.S. Census Bureau data (2024)
The market analysis for Section 8 investors in ZIP code 38671, which encompasses Southaven, Mississippi, highlights a favorable environment for those seeking stable rental income. The HUD Fair Market Rent (FMR) for the area is set at $1420 for the fiscal year 2024. In contrast, the market rent, as indicated by Zillow's ZORI (Zestimate of Rent Index), stands at $1575. This means that voucher tenants would generally cashflow at the FMR level, but landlords might see marginal gains when renting at the ZORI rate.
To further assess the investment potential, consider the median home value in the area, which is $235,188. Using this figure, we can calculate the rent-to-price ratio. A simple calculation reveals that the annual rent ($1575 * 12 months) is approximately $18,900, leading to a rent-to-price ratio of about 8.04%. This suggests that the rental income represents a reasonable percentage of the property's value, making it an attractive option for investors focused on rental yield.
The median days on market (DOM) for properties in this area is 32 days, indicating a relatively quick turnover for listings. Additionally, the price-cut share is a low 0.3%, suggesting that the market is robust and buyers are willing to pay asking prices without significant negotiation. These factors point to a strong rental market where demand outpaces supply, benefiting both landlords and small-portfolio investors.
In conclusion, while the HUD FMR allows for cashflow, the slightly higher market rent provides a marginal benefit, especially when considering the robustness of the local real estate market. Given the strong demand and limited need for price reductions, the most compelling angle for investors in ZIP 38671 is stability, ensuring consistent rental income and low vacancy rates over time.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.