Location: Mobile, AL | Metro: Mobile, 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 | $890 |
| 1 Bedroom | $930 |
| 2 Bedrooms | $1,080 |
| 3 Bedrooms | $1,400 |
| 4 Bedrooms | $1,480 |
| 5 Bedrooms | $1,717 |
| 6 Bedrooms | $1,923 |
| 7 Bedrooms | $2,077 |
| 8 Bedrooms | $2,181 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,400 | $220,587 | 0.63% | D |
U.S. Census Bureau data (2024)
A skeptical investor looking at ZIP 36525 might have several concerns regarding the feasibility of investing in a Section 8 property. Let's address these points directly using the available data.
Objection 1: Will Fair Market Rent (FMR) of $970 cover the mortgage on a $213,536 home?
The FMR of $970 is designed to reflect the average rent for a modest apartment in the area. To determine if it covers the mortgage, we need to calculate the monthly mortgage payment based on typical interest rates and loan terms. Assuming a 30-year fixed-rate mortgage at an average rate of 4.5%, the principal and interest payment alone would be approximately $1,065 per month. This means that the FMR does not fully cover the mortgage payment, leaving a shortfall of about $95 per month. However, this calculation does not take into account potential appreciation of the property, tax benefits, or other income streams that could offset this difference.
Objection 2: Is there enough renter demand at 16.6%?
The rental vacancy rate of 16.6% suggests that there is a moderate level of demand in ZIP 36525. A lower vacancy rate would indicate higher demand and potentially better returns. At 16.6%, landlords should expect some competition and possibly longer periods between tenants. However, the demand for affordable housing can remain steady even when overall vacancy rates are higher, which could mitigate some of these concerns.
Objection 3: Will vouchers keep pace with $965 market rents?
The market rent of $965 is close to the voucher amount of $970, indicating that vouchers are likely to cover most of the market rent. However, the exact match between voucher amounts and market rents can fluctuate based on local economic conditions and changes in federal funding. Investors should monitor these trends closely to ensure that they can maintain profitability. If the market rent increases faster than the voucher amount, it could lead to a situation where the voucher does not fully cover the cost of renting the property.
In conclusion, while the data provides insights into the challenges and opportunities in ZIP 36525, it also highlights the need for careful financial planning and ongoing monitoring of local market conditions. The investment in a Section 8 property requires a balanced approach to manage risks effectively.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.