Location: Perry County, AL | Metro: Birmingham-Hoover, AL HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $840 |
| 1 Bedroom | $900 |
| 2 Bedrooms | $980 |
| 3 Bedrooms | $1,230 |
| 4 Bedrooms | $1,390 |
| 5 Bedrooms | $1,612 |
| 6 Bedrooms | $1,805 |
| 7 Bedrooms | $1,949 |
| 8 Bedrooms | $2,046 |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 35034 is centered around the significant gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $990, while the Census ACS reports the market rent at $722. This means there is a gap of $268, or approximately 37%, between what landlords can charge under the Section 8 program and the prevailing market rate.
In this scenario where the FMR exceeds the market rent, voucher tenants become a lucrative option for landlords and small-portfolio investors. The higher allowable rent under Section 8 compared to the open market provides an opportunity to increase rental yields. By participating in the Section 8 program, landlords can secure a steady stream of income at rates above the current market conditions, which is particularly beneficial given that only 28.5% of residents in ZIP 35034 are renters. This lower percentage of renters suggests that the competition for rental properties might be less intense, making it easier to attract voucher tenants.
The median home value in ZIP 35034 is $183,491, indicating a relatively stable housing market. However, the median income of $36,002 highlights the financial constraints many residents face, making affordable housing options such as Section 8 vouchers essential. Landlords can leverage this situation to ensure their properties are occupied at rates that are advantageous for their investment, while still providing affordable housing solutions to those who need them.
To summarize, the $268 difference between the FMR and the market rent in ZIP 35034 represents a clear opportunity for landlords to enhance their rental yields. The combination of a slightly lower renter population and the financial realities faced by local residents makes Section 8 a viable strategy for maximizing returns while contributing to the community's housing needs.
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.