Location: Montgomery, AL | Metro: Montgomery, AL MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $790 |
| 1 Bedroom | $800 |
| 2 Bedrooms | $920 |
| 3 Bedrooms | $1,180 |
| 4 Bedrooms | $1,370 |
| 5 Bedrooms | $1,589 |
| 6 Bedrooms | $1,780 |
| 7 Bedrooms | $1,922 |
| 8 Bedrooms | $2,018 |
U.S. Census Bureau data (2024)
The classification of ZIP code 36040 hinges on its financial metrics, particularly focusing on yield and stability. The Federal Market Rent (FMR) for ZIP 36040 in fiscal year 2024 is set at $880. This figure represents the maximum rental assistance payment that a landlord can receive under the Section 8 program for a given unit type. Comparatively, the market rent stands at $676, indicating that there is a significant premium for Section 8 units in this area.
Stability, however, is a different matter. With 32.2% of residents being renters, the market has a moderate level of tenant occupancy. Unfortunately, the data does not provide the average days on market (DOM), which would be crucial for assessing how quickly properties can be rented out. The median household income in the area is $37,872, suggesting a lower-middle-income bracket, which could influence the financial health and reliability of potential tenants.
Given these figures, ZIP 36040 leans towards being a high-yield/low-stability market. The substantial difference between the FMR and the market rent ($880 vs $676) indicates a higher potential return on investment for landlords who participate in the Section 8 program. However, the relatively low median income and unknown DOM figures suggest that there might be challenges in maintaining steady cash flow due to possible difficulties in finding financially stable tenants and a potentially longer time to secure rentals.
To conclude, while the financial returns appear promising, the stability of cash flow is uncertain. Landlords should consider these factors carefully before investing in this market. Participation in the Section 8 program can offer a higher yield but comes with risks related to tenant turnover and financial reliability.
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.