Location: Tuscaloosa, AL | Metro: Birmingham-Hoover, AL 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 | $790 |
| 1 Bedroom | $840 |
| 2 Bedrooms | $920 |
| 3 Bedrooms | $1,160 |
| 4 Bedrooms | $1,300 |
| 5 Bedrooms | $1,508 |
| 6 Bedrooms | $1,689 |
| 7 Bedrooms | $1,824 |
| 8 Bedrooms | $1,915 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $920 | $88,474 | 1.04% | B |
| 3BR | $1,160 | $182,224 | 0.64% | D |
U.S. Census Bureau data (2024)
The rent math in ZIP 35006 does not work favorably for landlords. The Fair Market Rent (FMR) set at $1180 for the fiscal year 2024 by HUD is significantly higher than the actual market rent of $713 as reported by the Census ACS. This discrepancy suggests that landlords might struggle to charge rents at the level required by HUD to meet their investment goals.
Acquisition in ZIP 35006 is relatively affordable, with a median home value of $138,688. However, the lack of data on days on market (DOM) and the percentage of homes needing price cuts indicates a potential risk in accurately assessing the current housing market dynamics. Landlords should proceed with caution, considering these gaps in information could affect the true cost of acquiring properties.
Tenant demand in ZIP 35006 is modest. With a total population of 3,894, only 5.6% are renters. This low renter share implies limited demand for rental properties, which could pose challenges for landlords looking to fill vacancies quickly and maintain steady cash flows.
In summary, while the acquisition cost appears reasonable, the mismatch between HUD's FMR and the actual market rent, combined with the low renter share, presents significant hurdles for landlords and small-portfolio investors. The lack of detailed market data further complicates the decision-making process, suggesting that careful consideration and additional research are necessary before investing in this area.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.