Location: Montgomery, AL | Metro: Montgomery, 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 | $970 |
| 1 Bedroom | $990 |
| 2 Bedrooms | $1,130 |
| 3 Bedrooms | $1,450 |
| 4 Bedrooms | $1,680 |
| 5 Bedrooms | $1,949 |
| 6 Bedrooms | $2,183 |
| 7 Bedrooms | $2,358 |
| 8 Bedrooms | $2,476 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,130 | $155,000 | 0.73% | D |
| 3BR | $1,450 | $212,668 | 0.68% | D |
| 4BR | $1,680 | $314,606 | 0.53% | F |
| 5BR | $1,949 | $426,092 | 0.46% | F |
U.S. Census Bureau data (2024)
The market analysis for Section 8 investors targeting ZIP code 36054, located in Millbrook, AL, within the Montgomery, AL MSA metro area, reveals several key points. The HUD Fair Market Rent (FMR) for FY 2024 is set at $1030. This figure contrasts sharply with the actual market rent, which stands at $1,330 according to ZORI. As such, voucher tenants will only cashflow marginally at the FMR rate, necessitating a focus on premium units to ensure positive cash flow.
To derive the rent-to-price ratio, we can use the median home value of $219,930. Dividing the median monthly rent ($1,330) by the median home value ($219,930) gives us a ratio of approximately 0.6%. This indicates that rental income represents a relatively small portion of the property's value, suggesting that appreciation could be a stronger investment angle than cash flow alone.
The median days on market (DOM) and price-cut share are not applicable in this scenario, as they pertain to the buying dynamics rather than the renting landscape. However, given the strong demand for rental properties in this area, the stability of rental income remains a critical factor for investors.
In conclusion, while the cash flow potential for Section 8 investors in ZIP 36054 is limited, the primary strength lies in the potential for property appreciation, making it an attractive option for those seeking long-term growth in their real estate investments.
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.