Location: Jackson County, AL | Metro: Jackson County, AL
| Unit Size | Monthly FMR |
|---|---|
| Studio | $810 |
| 1 Bedroom | $810 |
| 2 Bedrooms | $1,030 |
| 3 Bedrooms | $1,380 |
| 4 Bedrooms | $1,630 |
| 5 Bedrooms | $1,891 |
| 6 Bedrooms | $2,118 |
| 7 Bedrooms | $2,287 |
| 8 Bedrooms | $2,401 |
U.S. Census Bureau data (2024)
To derive the Section 8 cap-rate picture for ZIP code 35746, we must first establish the fundamentals of the financial metrics involved. The Fair Market Rent (FMR) for a two-bedroom apartment in this area for FY 2026 is set at $870 per month. However, the median home value and market rent for the same area are not available, making it challenging to provide a comprehensive analysis.
The implied gross yield for a property rented under the Section 8 program can be calculated using the annualized FMR. For a two-bedroom unit, the annual rental income would be $870 multiplied by 12 months, totaling $10,440 per year. Without the median home value, we cannot calculate an exact cap rate, but we can discuss the implications of the gross yield.
In contrast, if we had the market rent and median home value, we could calculate the gross yield based on those figures. For example, if the median home value were $200,000 and the market rent was $1,200 per month, the annual market rent would be $14,400. This would imply a higher gross yield compared to the Section 8 scenario.
The 12.8% renter density suggests that while there is a significant portion of renters in the area, it also indicates that a majority of residents might prefer homeownership, potentially affecting demand for rental properties. Given the lack of data on the days-on-market (DOM), we cannot assess how quickly properties are being leased, but typically, a lower DOM would indicate a healthier rental market.
In the absence of market rent data, the Section 8 program provides a stable, government-backed income stream. However, the gross yield of $10,440 per year is likely lower than what could be achieved through market-rate rentals. Landlords and small-portfolio investors should consider the trade-off between the security of Section 8 payments and the potential for higher returns through market-rate rentals.
The current data does not allow for a precise cap-rate calculation, but it does suggest that Section 8 properties in ZIP 35746 will have a lower gross yield compared to market-rate rentals, assuming the latter's figures are higher. Investors should use this information to evaluate the feasibility of Section 8 versus market-rate investments, considering the stability of Section 8 income and the potential for higher yields in a more active rental market.
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.