Location: Marshall County, 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 | $830 |
| 1 Bedroom | $890 |
| 2 Bedrooms | $970 |
| 3 Bedrooms | $1,220 |
| 4 Bedrooms | $1,370 |
| 5 Bedrooms | $1,589 |
| 6 Bedrooms | $1,780 |
| 7 Bedrooms | $1,922 |
| 8 Bedrooms | $2,018 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,220 | $228,400 | 0.53% | F |
U.S. Census Bureau data (2024)
The classification of ZIP code 35031 hinges on the interplay between its yield potential and market stability. With a Fair Market Rent (FMR) of $970 for Section 8 in fiscal year 2024, compared to a market rent of $823, the area offers a higher-than-average yield for Section 8 properties. This difference suggests that landlords can potentially secure a rental income premium of $147 per unit above the local market rate.
Moreover, the median home value of $201,112 indicates a moderate investment cost for homeownership, which contrasts with the rental income dynamics. The lower median home value relative to the rental income could suggest an environment where rental properties are more economically viable than owner-occupied homes for many residents.
Regarding stability, the ZIP code has 24.2% of its population classified as renters, which is a notable figure but not exceptionally high. The lack of data on days on market (DOM) makes it challenging to assess the speed at which rental properties are filled, but the average household income of $54,345 provides insight into the financial health of the tenant pool. This income level supports a reasonable expectation that tenants will be able to meet their rental obligations consistently.
Based on these metrics, ZIP 35031 leans towards a steady-cashflow zone rather than a high-yield/low-stability market. The primary driver for this classification is the relatively stable tenant income and the moderate percentage of renters, which indicate a reliable demand for rental housing. However, the higher FMR for Section 8 properties does offer an attractive yield, making it a balanced option for investors seeking both yield and stability.
To summarize, with a Section 8 FMR of $970 versus a market rent of $823, and a median home value of $201,112, coupled with a 24.2% renter population and an average income of $54,345, ZIP 35031 presents a middle-ground opportunity. It is neither a purely speculative high-yield play nor a completely risk-free cash cow, but rather a zone where investors can achieve decent returns while maintaining a relatively stable portfolio.
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.