Location: Pontotoc County, MS | Metro: Calhoun County, MS
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 | $680 |
| 1 Bedroom | $770 |
| 2 Bedrooms | $910 |
| 3 Bedrooms | $1,180 |
| 4 Bedrooms | $1,340 |
| 5 Bedrooms | $1,554 |
| 6 Bedrooms | $1,740 |
| 7 Bedrooms | $1,879 |
| 8 Bedrooms | $1,973 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,180 | $154,082 | 0.77% | D |
U.S. Census Bureau data (2024)
The classification of ZIP code 38850 hinges on its financial metrics, which reveal a unique balance between yield and stability. With a Fair Market Rent (FMR) of $900 for the fiscal year 2026, this figure stands notably above the market rent of $655, indicating a strong potential for rental income in a federally subsidized housing program context. This discrepancy suggests a high-yield environment, especially when considering the median home value of $148,253. The higher FMR means that properties can potentially generate more income through Section 8 vouchers than they would through market rents.
Stability, however, is a different story. Only 15.2% of residents are renters, which is a relatively low percentage and could indicate a less stable tenant pool. Additionally, the lack of data on days on market (DOM) makes it difficult to assess how quickly properties might turn over or how competitive the rental market is. However, the median household income of $52,807 provides some assurance regarding the financial stability of the tenants, though it does not directly correlate with the ability to pay market rent if the majority of residents prefer homeownership.
Based on these figures, ZIP 38850 appears to be a high-yield/low-stability market. The significant difference between the FMR and market rent points towards a scenario where landlords can benefit from higher rental payments through Section 8 programs. However, the lower percentage of renters and the unknown turnover rate suggest that finding and retaining tenants might be challenging, thus reducing the overall stability of cash flow. For small-portfolio investors looking to maximize returns while being prepared for occasional vacancy periods, this ZIP code presents an opportunity. Landlords should prepare for a market that demands careful tenant selection and management practices to ensure steady cash flow despite the high-yield potential.
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.