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 | $950 |
| 1 Bedroom | $1,020 |
| 2 Bedrooms | $1,120 |
| 3 Bedrooms | $1,400 |
| 4 Bedrooms | $1,570 |
| 5 Bedrooms | $1,821 |
| 6 Bedrooms | $2,040 |
| 7 Bedrooms | $2,203 |
| 8 Bedrooms | $2,313 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,400 | $233,381 | 0.6% | F |
U.S. Census Bureau data (2024)
The classification of ZIP code 35188 on the axes of yield and stability reveals a market that offers moderate potential for both. With a Fair Market Rent (FMR) of $1,030 for fiscal year 2024, it stands above the local market rent of $940. This indicates a higher-than-average rental yield, which can be attractive for landlords looking to maximize their returns. The median home value in the area is $224,917, suggesting that there is a balance between property costs and rental income.
However, the stability of this market is somewhat lower. Only 9.2% of residents are categorized as long-term renters, which implies a higher turnover rate and potentially less stable cash flow. The average household income is $73,438, which is a critical figure for assessing the financial health of potential tenants. While this income level is reasonable, the lack of data on days on market (DOM) suggests uncertainty regarding how quickly properties might be rented out after becoming available.
To summarize, ZIP 35188 presents a scenario where it is neither a high-yield/low-stability flip-style market nor a steady-cashflow zone. Instead, it falls into a middle ground, offering a decent rental yield due to the favorable FMR compared to the market rent. However, the relatively low percentage of long-term renters and the absence of DOM data indicate a market that could experience fluctuations in tenant stability and rental speed. For investors, this means that while there is room for good returns, they should be prepared for occasional challenges in maintaining consistent occupancy and cash flow.
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.