Location: Cherokee County, AL | Metro: Gadsden, 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 | $670 |
| 1 Bedroom | $820 |
| 2 Bedrooms | $960 |
| 3 Bedrooms | $1,220 |
| 4 Bedrooms | $1,380 |
| 5 Bedrooms | $1,601 |
| 6 Bedrooms | $1,793 |
| 7 Bedrooms | $1,936 |
| 8 Bedrooms | $2,033 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $960 | $116,450 | 0.82% | C |
| 3BR | $1,220 | $213,978 | 0.57% | F |
| 4BR | $1,380 | $345,728 | 0.4% | F |
| 5BR | $1,601 | $469,781 | 0.34% | F |
U.S. Census Bureau data (2024)
To determine if you should buy in ZIP 35901 (Gadsden, AL) for Section 8, follow this decision tree:
Step 1: Calculate if the Fair Market Rent (FMR) of $910 can cover the debt service on a property valued at $158,195.
If the debt service on a $158,195 property is less than $910 per month, then the answer is Yes. For instance, if your mortgage payment, including taxes and insurance, is $750 per month, the FMR would comfortably exceed that amount, making the investment viable.
If the debt service is higher than $910, the answer is No. For example, if your total monthly payments exceed $910, the FMR will not cover your costs, leading to a loss.
It Depends if the difference between the FMR and debt service is marginal. This requires a detailed analysis of other income sources and expenses.
Step 2: Compare the market rent of $820 (from Census ACS) with the FMR of $910.
If market rents are below the FMR, the answer is Yes. Landlords can charge up to the FMR without overpricing the unit relative to what tenants can afford.
If market rents are at or above the FMR, the answer is No. Tenants might struggle to find sufficient funds to cover the rent, especially if they are already paying close to the FMR in the private market.
It Depends if market rents are slightly below the FMR. It's worth considering the trend and potential changes in market conditions.
Step 3: Evaluate the rental demand. In Gadsden, 34.1% of residents are renters and the average Days on Market (DOM) is 81 days.
If the rental rate is high and the DOM is low, the answer is Yes. A high percentage of renters indicates strong demand, while a relatively short DOM suggests that units are filling quickly.
If the rental rate is low and the DOM is high, the answer is No. Low demand and slow turnover indicate that it might be difficult to fill units consistently.
It Depends if the rental rate is moderate but the DOM is acceptable. You'll need to consider the stability of the local economy and the reliability of the housing authority.
In summary, the viability of buying in ZIP 35901 for Section 8 hinges on these factors. Ensure that the FMR covers your debt service, market rents are below the FMR, and there is sufficient rental demand. With the given data, Gadsden shows potential for landlords willing to invest in Section 8 properties, provided they meet these criteria.
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.