Location: Gadsden, 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 | $650 |
| 1 Bedroom | $800 |
| 2 Bedrooms | $940 |
| 3 Bedrooms | $1,190 |
| 4 Bedrooms | $1,350 |
| 5 Bedrooms | $1,566 |
| 6 Bedrooms | $1,754 |
| 7 Bedrooms | $1,894 |
| 8 Bedrooms | $1,989 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $940 | $81,494 | 1.15% | B |
| 3BR | $1,190 | $171,538 | 0.69% | D |
| 4BR | $1,350 | $238,224 | 0.57% | F |
U.S. Census Bureau data (2024)
A skeptical investor considering investing in ZIP code 35904, Gadsden, AL, might have several concerns. Let's address these with the available data.
Will FMR $930 (zip FY 2024) cover the mortgage on a $114,397 home?
The Fair Market Rent (FMR) for a one-bedroom apartment in ZIP 35904 for fiscal year 2024 is set at $930. To determine if this will cover the mortgage on a $114,397 home, we need to calculate the potential monthly mortgage payment. Assuming a 30-year fixed-rate mortgage at an interest rate of 4.5%, the monthly mortgage payment for a home priced at $114,397 would be approximately $560. This figure does not include property taxes, insurance, and maintenance costs, which can add another $150-$200 per month. Therefore, relying solely on the FMR of $930 would not fully cover the mortgage and additional expenses. However, the FMR is designed to reflect a range of rental prices, so higher-end units could potentially command higher rents that exceed the FMR.
Is there enough renter demand at 28.0%?
The percentage of renters in ZIP 35904 stands at 28.0%. This figure suggests that a significant portion of the population prefers homeownership over renting. For an investor, this could indicate a smaller pool of potential tenants. However, it also means that those who do rent are likely to be more stable and reliable, as they represent a choice rather than a necessity. Additionally, the percentage of renters does not necessarily correlate with the total demand for rental properties. Other factors such as job growth, population trends, and the availability of affordable housing play crucial roles in determining the actual demand.
Will vouchers keep pace with $817 market rents?
The market rent for a one-bedroom apartment in ZIP 35904 is $817. The Housing Choice Voucher Program, commonly known as Section 8, aims to subsidize rents for low-income families. However, whether the voucher amounts will match or exceed the market rent of $817 depends on the local housing authority's policies and funding levels. Typically, voucher payments are adjusted annually based on the FMR. In Gadsden, AL, the average voucher payment is often lower than the FMR. Therefore, it is likely that voucher holders will face a shortfall between their voucher amount and the $817 market rent. Landlords should consider this gap when deciding to accept Section 8 vouchers, as they may need to cover part of the difference or seek additional sources of income.
The data provides insights into the challenges and opportunities of investing in ZIP 35904. While there are risks associated with covering mortgage costs and dealing with voucher shortfalls, the stability of the rental market and the potential for higher rents in certain segments offer a balanced perspective on the investment landscape.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.