Location: Clarksville, TN | Metro: Clarksville, TN-KY HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $990 |
| 1 Bedroom | $990 |
| 2 Bedrooms | $1,220 |
| 3 Bedrooms | $1,690 |
| 4 Bedrooms | $2,040 |
| 5 Bedrooms | $2,366 |
| 6 Bedrooms | $2,650 |
| 7 Bedrooms | $2,862 |
| 8 Bedrooms | $3,005 |
U.S. Census Bureau data (2024)
The Section 8 housing analysis for ZIP code 42254 centers around the discrepancy between the Fair Market Rent (FMR) and the actual market rent as reported by the Census American Community Survey (ACS). The FMR for the area is set at $970 per month for fiscal year 2024, while the average market rent stands at $725. This creates a gap of $245, or approximately 31.5%, between what landlords could potentially charge through the Section 8 program and the current market rate.
In this scenario where the FMR exceeds the market rent, landlords can leverage the Section 8 program to increase their rental income significantly. Voucher tenants under Section 8 would pay the government-subsidized rate of $970, which is higher than the prevailing market rate. This makes the ZIP code a strong yield play for landlords looking to maximize their monthly returns on investment properties.
However, it's crucial to anchor this analysis within the broader context of the ZIP code. With only 23.9% of residents being renters, the demand for rental units might be lower compared to areas with a higher percentage of renters. Additionally, the median home value in the area is $162,036, indicating that homeownership is relatively affordable, which could further suppress rental demand. The median income of $47,250 suggests that many residents may struggle to afford the higher rents charged through the Section 8 program, even if they are subsidized.
Despite these factors, the financial incentive to accept Section 8 tenants remains compelling. Landlords should be aware of the administrative requirements and potential challenges associated with the program, but the opportunity to earn a higher rent than the market rate makes it an attractive option. For small-portfolio investors, this can provide a stable source of income, especially when considering the low vacancy rate and the federal government's role in ensuring timely payments.
To summarize, the $245 or 31.5% gap between the FMR and market rent in ZIP code 42254 presents a significant opportunity for landlords to enhance their yields. However, they must also consider the local economic conditions and the potential impact on tenant pool and property management.
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.