Location: Huntsville, AL | Metro: Huntsville, AL MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,680 |
| 1 Bedroom | $1,760 |
| 2 Bedrooms | $2,010 |
| 3 Bedrooms | $2,600 |
| 4 Bedrooms | $3,360 |
| 5 Bedrooms | $3,898 |
| 6 Bedrooms | $4,366 |
| 7 Bedrooms | $4,715 |
| 8 Bedrooms | $4,951 |
U.S. Census Bureau data (2024)
The Section 8 thesis for ZIP code 35808 centers around the disparity between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1870, whereas the Census ACS reports the market rent at $1654. This indicates that the FMR exceeds the market rent by $216, or approximately 13%.
The higher FMR relative to the market rent makes ZIP 35808 an attractive area for landlords and small-portfolio investors seeking to maximize yields. Voucher tenants provide a stable and reliable source of income due to the government's timely payment of subsidies, ensuring that landlords receive the full FMR amount, which is above the typical market rate. This scenario allows property owners to benefit financially without having to lower their rents to compete with the open market.
However, it is crucial to understand the broader context of the ZIP code. With 97.5% of residents being renters, there is a significant demand for rental properties. The median income in the area is $142,273, suggesting that residents have the financial capability to afford higher rents. Despite this, the median home value is listed as N/A, indicating a predominantly rental-based housing market.
The gap between FMR and market rent means that landlords can charge rents closer to the FMR level when accepting voucher tenants, thereby increasing their rental income above what they might receive in the open market. This makes the ZIP code an excellent opportunity for yield-focused investments, as landlords can leverage the government's willingness to pay a higher rate to improve their cash flow and overall investment returns.
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.