Location: Birmingham-Hoover, 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 | $930 |
| 1 Bedroom | $1,000 |
| 2 Bedrooms | $1,090 |
| 3 Bedrooms | $1,370 |
| 4 Bedrooms | $1,540 |
| 5 Bedrooms | $1,786 |
| 6 Bedrooms | $2,000 |
| 7 Bedrooms | $2,160 |
| 8 Bedrooms | $2,268 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,090 | $134,083 | 0.81% | C |
| 3BR | $1,370 | $261,702 | 0.52% | F |
| 4BR | $1,540 | $366,972 | 0.42% | F |
U.S. Census Bureau data (2024)
The rent math in ZIP 35116 does not work in favor of landlords. The Fair Market Rent (FMR) set at $1190 for the fiscal year 2024 is significantly higher than the actual market rent of $849, as reported by the Census ACS. This discrepancy means that landlords may struggle to find tenants willing to pay the higher FMR rate.
Acquisition in ZIP 35116 is relatively affordable, with a median home value of $265,431. However, the lack of data on days on market (DOM) and the fact that only 0.2% of homes are listed with a price cut suggest that the market might be tight, making it challenging to negotiate lower prices for potential acquisitions.
Tenant demand in ZIP 35116 is limited. The area has a population of 5,227, with only 8.3% of residents being renters. This low percentage indicates that there are fewer potential tenants relative to homeowners, which could make it difficult to fill rental properties consistently.
In summary, while the acquisition cost appears reasonable, the mismatch between the FMR and market rent, along with the limited tenant demand, suggests that investing in rental properties in ZIP 35116 may not be financially viable. Landlords should carefully consider these factors before entering this market.
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.