Location: Decatur, AL | Metro: Decatur, AL MSA
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 | $900 |
| 1 Bedroom | $910 |
| 2 Bedrooms | $1,110 |
| 3 Bedrooms | $1,430 |
| 4 Bedrooms | $1,830 |
| 5 Bedrooms | $2,123 |
| 6 Bedrooms | $2,378 |
| 7 Bedrooms | $2,568 |
| 8 Bedrooms | $2,696 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,110 | $186,942 | 0.59% | F |
| 3BR | $1,430 | $268,586 | 0.53% | F |
| 4BR | $1,830 | $367,260 | 0.5% | F |
| 5BR | $2,123 | $463,181 | 0.46% | F |
U.S. Census Bureau data (2024)
The classification of ZIP 35603 in Decatur, AL, as a real estate market for Section 8 landlords and small-portfolio investors hinges on two key metrics: yield and stability.
On the yield axis, the Fair Market Rent (FMR) for ZIP 35603 in fiscal year 2024 is set at $970, which is notably lower than the market rent of $1,155. This indicates that landlords who rely solely on Section 8 vouchers will see a lower rental income compared to market rates. However, the median home value of $280,518 suggests that property values are not excessively high, potentially offering a reasonable return on investment when considering the cost of acquisition and maintenance.
Moving to the stability axis, ZIP 35603 shows a mixed picture. With 26.1% of residents being renters, there is a decent portion of the population relying on rental housing, which can provide a stable demand for rental properties. The average Days on Market (DOM) of 47 days signals a relatively quick turnover rate for listings, indicating a healthy rental market where vacancies do not linger long. Additionally, the median household income of $81,490 suggests that tenants are likely to be financially capable of maintaining their rental obligations, adding to the overall stability of the market.
Combining these factors, ZIP 35603 leans towards being a steady-cashflow zone. While it does not offer the highest yields due to the disparity between FMR and market rents, the stability indicators point to a reliable market. The relatively low DOM and moderate renter percentage suggest that landlords can expect consistent occupancy and rental income without the risks associated with high vacancy rates. Moreover, the median income level supports the ability of tenants to fulfill their lease terms, reducing the likelihood of default.
Landlords and investors should weigh the lower rental income against the benefits of steady occupancy and tenant reliability. For those looking to avoid the volatility of higher-yield markets, ZIP 35603 provides a balanced approach, ensuring a predictable cash flow while minimizing the financial risks often associated with more speculative investments.
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.