Location: Montgomery, AL | Metro: Montgomery, AL MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,150 |
| 1 Bedroom | $1,170 |
| 2 Bedrooms | $1,340 |
| 3 Bedrooms | $1,720 |
| 4 Bedrooms | $1,990 |
| 5 Bedrooms | $2,308 |
| 6 Bedrooms | $2,585 |
| 7 Bedrooms | $2,792 |
| 8 Bedrooms | $2,932 |
To classify ZIP 36068 in Alabama, we need to analyze the available data points regarding yield and stability. The primary figure we have for yield is the Fair Market Rent (FMR) set at $1240 for the fiscal year 2024. This FMR represents the maximum amount that a landlord can charge for a rental unit under the Section 8 program in this area.
Without specific market rent or home value data for ZIP 36068, it's challenging to provide a comprehensive yield analysis. However, the FMR can be considered a benchmark for rental pricing in subsidized housing. If the actual market rents are higher, then the yield would be lower relative to unsubsidized investments, but the guaranteed income from Section 8 can offer stability.
Regarding stability, the lack of detailed data such as the percentage of renters, days on market (DOM), and median income complicates a precise assessment. Typically, a higher percentage of renters and shorter DOM indicate a stable rental market, while median income provides insight into the financial health of potential tenants.
In the absence of these metrics, we must rely on the FMR as an indicator. Given that the FMR is set at $1240, landlords can expect a consistent income stream from Section 8 participants, which suggests a level of stability. However, without knowing how many residents participate in the Section 8 program or the broader economic conditions of the area, it's difficult to determine if this is a high-yield/low-stability market or a steady-cashflow zone.
The classification leans towards a steady-cashflow zone due to the guaranteed income from the FMR. For a high-yield/low-stability market, typically there would be higher volatility in tenant turnover and income levels, which could be mitigated by higher rental rates. Since we don't have those details, we cannot definitively state the yield is high or low compared to the market.
To make a more informed decision, landlords and small-portfolio investors should seek additional local market data, including non-subsidized rental rates and property values, to compare against the FMR. This will help in understanding the true yield potential of the area. Additionally, insights into the local economy and the proportion of residents who are likely to require subsidized housing will provide clarity on the stability of the market.
Data Sources: FMR data from HUD (2027).
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.