Location: Pike County, AL | Metro: Coffee County, AL
| Unit Size | Monthly FMR |
|---|---|
| Studio | $700 |
| 1 Bedroom | $700 |
| 2 Bedrooms | $920 |
| 3 Bedrooms | $1,170 |
| 4 Bedrooms | $1,310 |
| 5 Bedrooms | $1,520 |
| 6 Bedrooms | $1,702 |
| 7 Bedrooms | $1,838 |
| 8 Bedrooms | $1,930 |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate picture for ZIP code 36010 reveals a notable disparity between the federal market rent (FMR) and the actual market rent. For a two-bedroom property, the annualized FMR for fiscal year 2026 stands at $900, while the Census ACS data indicates a market rent of $707.
To calculate the implied gross yield, we use the median home value of $115,575 as the basis. The gross yield from Section 8 subsidies is calculated as follows:
The FMR scenario suggests a higher gross yield, making it appear more attractive at first glance. However, the reality of the situation is more nuanced. With a renter density of 31.1%, it's clear that a significant portion of the population in ZIP 36010 relies on rental housing. This high dependency on rental properties can influence the demand for Section 8 units, potentially making the FMR scenario more feasible. Yet, the absence of data regarding the days on market (DOM) for these properties means there's uncertainty around how quickly these units would be occupied under either scenario.
In conclusion, while the FMR scenario presents a better gross yield, the market rent scenario reflects the current economic conditions more accurately. Landlords and investors should consider the 31.1% renter density and the potential challenges of finding tenants willing to pay the FMR. Given the limited data on DOM, the market rent scenario is likely more realistic for most investment considerations in ZIP 36010.
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.