Location: Daphne-Fairhope-Foley, AL | Metro: Daphne-Fairhope-Foley, 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 | $1,320 |
| 1 Bedroom | $1,470 |
| 2 Bedrooms | $1,600 |
| 3 Bedrooms | $2,070 |
| 4 Bedrooms | $2,620 |
| 5 Bedrooms | $3,039 |
| 6 Bedrooms | $3,404 |
| 7 Bedrooms | $3,676 |
| 8 Bedrooms | $3,860 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,600 | $182,422 | 0.88% | C |
| 3BR | $2,070 | $281,917 | 0.73% | D |
| 4BR | $2,620 | $400,275 | 0.65% | D |
| 5BR | $3,039 | $504,758 | 0.6% | D |
U.S. Census Bureau data (2024)
The rent math in ZIP 36526, which includes Daphne, AL, and is part of the Daphne-Fairhope-Foley, AL MSA metro area, does not fully align with the Federal Market Rent (FMR) and the Zillow Observed Rent Index (ZORI). The FMR for the fiscal year 2024 is set at $1,540, whereas the market rent, as indicated by ZORI, stands at $1,617. This suggests that landlords might struggle to meet the rental income required by the FMR when setting market rates.
Regarding the affordability of acquisitions, the median home value of $326,655 provides a reasonable entry point for investment properties. The 66-day Days on Market (DOM) indicates that homes are typically sold relatively quickly, suggesting a stable and active market. Additionally, the low 0.3% share of homes that have had their prices cut highlights a strong seller's market where homes retain their value well.
Tenant demand in ZIP 36526 is evident given the population of 36,484 and a significant 26.4% renter share. This translates to approximately 9,630 renters, a substantial number that can support a rental market. However, the gap between FMR and market rent could impact the ability to attract tenants eligible for Section 8 vouchers.
Verdict: While ZIP 36526 presents an affordable opportunity for property acquisition with a strong seller's market, the discrepancy between FMR and market rent poses a challenge for landlords participating in the Section 8 program. Despite robust tenant demand, the mismatch in rental pricing may limit the success of Section 8 investments unless adjustments are made to align with market conditions. For small-portfolio investors looking to enter this market, careful consideration of these factors is essential.
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.