Location: Tuscaloosa, AL | Metro: Tuscaloosa, AL HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,010 |
| 1 Bedroom | $1,010 |
| 2 Bedrooms | $1,210 |
| 3 Bedrooms | $1,530 |
| 4 Bedrooms | $1,590 |
| 5 Bedrooms | $1,844 |
| 6 Bedrooms | $2,065 |
| 7 Bedrooms | $2,230 |
| 8 Bedrooms | $2,342 |
U.S. Census Bureau data (2024)
ZIP 35474, located within the Tuscaloosa, AL HUD Metro FMR Area, offers a strategic fit for a Section 8 portfolio due to its characteristics as a cash-flow anchor. The Federal Market Rent (FMR) for FY 2024 is set at $1070, which is notably higher than the current market rent of $1,058. This positive spread ensures that properties within this ZIP code can generate reliable cash flow when leased under Section 8 contracts, given that the government pays the difference between the actual rent and the FMR.
The median home value in ZIP 35474 stands at $222,898, indicating that it is a moderately priced area. This makes it attractive for investors looking to balance between property costs and rental income potential. Despite the relatively low median income of $87,933, the high renter share of 13.7% suggests a significant portion of the population relies on rental housing, creating a stable demand for Section 8 units.
The 0.2% price-cut share and N/A-day Days on Market (DOM) indicate that the market is highly competitive with little need for significant price reductions or extended listing periods. This stability further supports the cash-flow anchor role, as it minimizes risks associated with vacancy rates and fluctuating rents.
In summary, ZIP 35474 serves as an effective cash-flow anchor within a Section 8 portfolio strategy. The favorable spread between the FMR and market rent, combined with a moderate home value and competitive market conditions, ensures consistent and reliable returns for investors.
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.