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 | $1,050 |
| 1 Bedroom | $1,060 |
| 2 Bedrooms | $1,220 |
| 3 Bedrooms | $1,570 |
| 4 Bedrooms | $1,810 |
| 5 Bedrooms | $2,100 |
| 6 Bedrooms | $2,352 |
| 7 Bedrooms | $2,540 |
| 8 Bedrooms | $2,667 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,220 | $155,320 | 0.79% | D |
| 3BR | $1,570 | $193,374 | 0.81% | C |
| 4BR | $1,810 | $245,137 | 0.74% | D |
| 5BR | $2,100 | $392,480 | 0.54% | F |
U.S. Census Bureau data (2024)
The potential risks for investing in Section 8 housing in ZIP code 36106 in Montgomery, Alabama, must be carefully considered. Tenant turnover can be a significant issue, with the market rent at $1,242 compared to the Fair Market Rent (FMR) of $1,150 for FY 2024. This disparity suggests that tenants might prefer the lower cost of Section 8 vouchers over paying higher market rents, leading to frequent changes in occupancy.
Vacancy exposure is another concern. The average days on market (DOM) for properties in this area is 46 days, which means landlords could face periods where units are unoccupied, resulting in lost rental income. Additionally, the deferred maintenance exposure is notable given the typical home value of $194,034 and the median household income of $69,087. Landlords may need to invest in property improvements to meet Section 8 standards, which could strain financial resources.
However, these risks are tempered by the high renter share of 43.8%. High renter density generally translates into a robust demand for rental properties, including those accepting Section 8 vouchers. This ensures that there is a larger pool of potential tenants who can utilize their vouchers, thereby reducing the likelihood of extended vacancies.
In conclusion, the verdict for a first-time Section 8 landlord in ZIP code 36106 is moderate risk.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.