Location: Escambia County, AL | Metro: Covington County, AL
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 | $710 |
| 1 Bedroom | $720 |
| 2 Bedrooms | $920 |
| 3 Bedrooms | $1,180 |
| 4 Bedrooms | $1,540 |
| 5 Bedrooms | $1,786 |
| 6 Bedrooms | $2,000 |
| 7 Bedrooms | $2,160 |
| 8 Bedrooms | $2,268 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,180 | $185,358 | 0.64% | D |
U.S. Census Bureau data (2024)
The market analysis for Section 8 investors in ZIP code 36420, located in the Escambia County, AL metro area, reveals a competitive rental environment. The HUD Fair Market Rent (FMR) for the area is set at $780 for the fiscal year 2026, which is notably higher than the market rent reported by the Census ACS at $699. This indicates that voucher tenants will cashflow at FMR, providing a positive financial outlook for landlords.
To further analyze the investment potential, consider the median home value in ZIP 36420, which stands at $147,642. Using this figure, we can derive a rent-to-price ratio. Given the HUD FMR of $780, the annual rent would be $9,360, leading to a rent-to-price ratio of approximately 6.3%. This suggests that properties in this area are reasonably priced relative to their rental income potential, making it a viable option for investors looking to balance between cashflow and property value.
The dynamics of the local real estate market also play a role in investment decisions. The median Days on Market (DOM) is N/A, indicating insufficient data for a precise assessment of how quickly homes are sold. However, the low 0.2% price-cut share suggests that homes are generally selling close to their asking price, implying a stable market with minimal pressure to reduce prices. While these metrics are important, they have less direct impact on the rent-vs-buy decision for voucher holders, who are primarily concerned with rental affordability.
In conclusion, the strongest investor angle in ZIP 36420 is cashflow. With voucher tenants paying above the market rent, landlords can expect steady positive cashflow from their investments, especially when considering the favorable rent-to-price ratio and the stability of home sales in the area.
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.