Location: Dothan, AL | Metro: Dothan, AL HUD Metro FMR Area
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 | $990 |
| 1 Bedroom | $990 |
| 2 Bedrooms | $1,250 |
| 3 Bedrooms | $1,670 |
| 4 Bedrooms | $1,830 |
| 5 Bedrooms | $2,123 |
| 6 Bedrooms | $2,378 |
| 7 Bedrooms | $2,568 |
| 8 Bedrooms | $2,696 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,670 | $243,160 | 0.69% | D |
| 4BR | $1,830 | $414,583 | 0.44% | F |
| 5BR | $2,123 | $685,367 | 0.31% | F |
U.S. Census Bureau data (2024)
The analysis of ZIP code 36305 in Dothan, AL, reveals several key points that are crucial for landlords and small-portfolio investors considering this area. First, regarding the rent math, it does not work in favor of landlords. The Fair Market Rent (FMR) for FY 2024 is set at $1210, which is below the market rent indicated by ZORI at $1,395. This suggests that landlords may struggle to cover their costs if they align their rental rates with the FMR.
Second, the acquisition cost is relatively affordable. With a median home value of $267,712, potential investors can enter the market without needing an exorbitant budget. However, the lack of data on days on market (DOM) and the low 0.2% price-cut share indicate that the housing market might be stable but not particularly dynamic. This stability could mean less opportunity for quick flips or rapid appreciation in property values.
Third, there is sufficient tenant demand. The population of 17,610 includes a significant 33.3% who are renters. This high percentage of renters suggests that there will be a steady pool of potential tenants, which is beneficial for maintaining occupancy rates.
In summary, while the rent math is challenging due to the discrepancy between the FMR and the actual market rent, the acquisition cost remains reasonable. The strong tenant demand provides a solid foundation for long-term investment stability. For investors focused on steady rental income rather than rapid appreciation, ZIP 36305 presents a viable option despite the lower FMR compared to market rates.
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.