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 | $1,410 |
| 1 Bedroom | $1,470 |
| 2 Bedrooms | $1,710 |
| 3 Bedrooms | $2,210 |
| 4 Bedrooms | $2,350 |
| 5 Bedrooms | $2,726 |
| 6 Bedrooms | $3,053 |
| 7 Bedrooms | $3,297 |
| 8 Bedrooms | $3,462 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,710 | $342,166 | 0.5% | F |
| 3BR | $2,210 | $462,803 | 0.48% | F |
| 4BR | $2,350 | $656,223 | 0.36% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 36528 in Alabama reveals some key insights into potential investment returns. The Fair Market Rent (FMR) for a 2-bedroom apartment in this area for fiscal year 2024 is set at $1340 per month. When annualized, this translates to an annual rental income of $16,080. In contrast, the market rent for a similar property is reported at $1,844 per month, equating to an annual rental income of $22,128.
To calculate the gross yield, we use the median home value of $459,859. For the Section 8 scenario, the gross yield would be approximately 3.5%, calculated as follows: ($16,080 / $459,859) * 100 = 3.5%. On the other hand, if relying on market rent, the gross yield jumps to about 4.8%, computed by: ($22,128 / $459,859) * 100 = 4.8%.
Given the 2.5% renter density in ZIP 36528, it's important to note that the availability of tenants willing to pay market rates may be limited. Additionally, the N/A-day Days on Market (DOM) indicates incomplete data, which could suggest either very quick sales or significant variability in the local real estate market. This makes it challenging to predict how long properties might remain vacant between tenancies, potentially impacting the overall yield.
Considering these factors, the Section 8 gross yield of 3.5% provides a more stable, though lower, return compared to the market rent gross yield of 4.8%. While the higher market rent gross yield is tempting, the lower tenant density and uncertain market conditions suggest that the Section 8 option offers greater security and reliability in terms of occupancy and consistent income.
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.