Location: Franklin County, AL | Metro: Decatur, AL MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $730 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $920 |
| 3 Bedrooms | $1,210 |
| 4 Bedrooms | $1,400 |
| 5 Bedrooms | $1,624 |
| 6 Bedrooms | $1,819 |
| 7 Bedrooms | $1,965 |
| 8 Bedrooms | $2,063 |
U.S. Census Bureau data (2024)
The investment risk assessment for ZIP code 35651 in regards to Section 8 housing reveals several critical issues that could go wrong for landlords and small-portfolio investors. Firstly, tenant turnover is a significant concern due to the disparity between the market rent of $576 and the Fair Market Rent (FMR) of $870 for FY 2024. This gap can lead to frequent changes in occupancy as tenants seek better deals, impacting stability and long-term income predictability.
Vacancy exposure is another risk factor. The Days on Market (DOM) data is currently unavailable, which makes it challenging to estimate how quickly a property might be filled if a tenant leaves. However, with a typical home value of $237,118 and a median income of $79,310, there's a notable deferred maintenance exposure. Homeowners may struggle to keep up with necessary repairs and improvements, leading to potential safety and habitability issues that could affect rental properties.
Despite these challenges, the high renter share of 10.6% in ZIP 35651 presents an opportunity. High renter density typically correlates with higher demand for rental housing, including Section 8 vouchers. This increased demand can mitigate some risks associated with vacancy and turnover, as there is a larger pool of potential tenants who can occupy the property promptly.
In conclusion, the overall risk for a first-time Section 8 landlord in ZIP 35651 is moderate. While there are significant risks related to tenant turnover and deferred maintenance, the high renter density offers a counterbalance that can help ensure steady occupancy and income.
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.