Location: Marshall County, KY | Metro: Calloway County, KY
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 | $1,060 |
| 1 Bedroom | $1,140 |
| 2 Bedrooms | $1,450 |
| 3 Bedrooms | $1,780 |
| 4 Bedrooms | $1,930 |
| 5 Bedrooms | $2,239 |
| 6 Bedrooms | $2,508 |
| 7 Bedrooms | $2,709 |
| 8 Bedrooms | $2,844 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,780 | $240,569 | 0.74% | D |
U.S. Census Bureau data (2024)
The ZIP code 42054 encompasses a small community with a total population of 837 residents. The area has a significant rental market, with 39.5% of its residents being renters. The median household income here stands at $58,911, which places it below the national average but still within a comfortable range for many families. Median home values in the region are relatively low, at $204,434, indicating an affordable housing market.
Moving into the specifics of the rental market, the Fair Market Rent (FMR) for the metro area in fiscal year 2026 is set at $1,470. However, the current market rent, according to Census ACS data, is significantly lower at $1,099. This discrepancy suggests that there is potential for rental income to increase towards the FMR level, especially if improvements are made to properties to meet the higher standard.
Given these economic conditions, ZIP 42054 would suit both hands-off voucher operators and hands-on value-add buyers. For hands-off operators, the lower market rent compared to the FMR provides a buffer, ensuring that Section 8 vouchers can cover the majority of rental costs without requiring extensive property modifications. On the other hand, value-add buyers have an opportunity to renovate properties and raise rents closer to the FMR, thus increasing their cash flow. With a sizeable portion of the population renting, the demand for affordable housing is evident, making either investment strategy viable.
The relatively low median home value also indicates that there is room for growth in property appreciation, especially if the local economy improves or if the area becomes more attractive due to renovations or new developments. Given the demographic makeup and the economic indicators, landlords and small-portfolio investors should find the environment in ZIP 42054 conducive to stable returns, with potential for higher yields through active management.
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.