Location: Dothan, AL | Metro: Dothan, AL HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $730 |
| 1 Bedroom | $730 |
| 2 Bedrooms | $920 |
| 3 Bedrooms | $1,230 |
| 4 Bedrooms | $1,350 |
| 5 Bedrooms | $1,566 |
| 6 Bedrooms | $1,754 |
| 7 Bedrooms | $1,894 |
| 8 Bedrooms | $1,989 |
U.S. Census Bureau data (2024)
The analysis for ZIP code 36340 reveals a significant disparity between the Fair Market Rent (FMR) and the actual market rent. The FMR for FY 2024 is set at $860, whereas the Census ACS indicates a market rent of $661. This means that the FMR is $199 higher than the market rent, representing an increase of approximately 30%.
The gap between FMR and market rent in ZIP 36340 makes it a strategic yield play for landlords who accept Section 8 vouchers. With 23.8% of residents being renters and a median home value of $138,790, there is a notable demand for affordable housing. Despite the median income in the area being $50,111, the FMR exceeds the average market rent, allowing landlords to receive higher payments than they would from typical market-rate tenants.
However, accepting Section 8 voucher tenants comes with its own set of challenges. Landlords must understand that while the FMR is higher, the Housing Authority pays only a portion of the rent, and the tenant contributes the difference based on their income. In ZIP 36340, landlords may find themselves renting properties below the open-market rates, which could affect their overall profitability. It is crucial for landlords to balance the benefits of steady, government-backed income with the potential drawbacks of lower-than-market rental rates.
To summarize, the FMR in ZIP 36340 is $199 or 30% above the market rent. This makes the area attractive for landlords seeking to maximize yields through Section 8 participation. However, the decision to accept voucher tenants should be weighed against the potential for receiving lower rents compared to the open market.
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.