Section 8 Fair Market Rent (FMR) for ZIP 36536 - 2027
Location: Daphne-Fairhope-Foley, AL | Metro: Daphne-Fairhope-Foley, AL MSA
FY 2027 Fair Market Rent Rates
| Unit Size |
Monthly FMR |
| Studio | $1,180 |
| 1 Bedroom | $1,310 |
| 2 Bedrooms | $1,430 |
| 3 Bedrooms | $1,850 |
| 4 Bedrooms | $2,340 |
| 5 Bedrooms | $2,714 |
| 6 Bedrooms | $3,040 |
| 7 Bedrooms | $3,283 |
| 8 Bedrooms | $3,447 |
The decision to invest in ZIP code 36536 for Section 8 properties hinges on several key factors. Here's how to evaluate the opportunity:
- Does the Fair Market Rent (FMR) of $1360 cover debt service on a property?
- Yes: If the FMR can comfortably exceed your total monthly mortgage payments, including principal, interest, taxes, and insurance, then it makes financial sense to consider purchasing a Section 8 property in this ZIP code.
- No: If the FMR does not cover these costs, purchasing a Section 8 property would be financially unwise as it would result in a loss.
- Is the market rent above, at, or below the FMR?
- Above FMR: If the market rent is higher than the FMR of $1360, you might want to reconsider focusing solely on Section 8 properties. Non-Section 8 tenants could offer better financial returns.
- At FMR: If the market rent equals the FMR, Section 8 properties are on par with the market. This scenario supports investing in Section 8 properties but also indicates that non-Section 8 investments could be equally viable.
- Below FMR: If the market rent is lower than the FMR, Section 8 properties provide a higher rental income compared to the general market, making them a solid investment choice.
- Are there enough renters and is the days on market (DOM) sufficient to ensure demand?
- It Depends: Without specific percentages of renters and DOM data, it's challenging to definitively assess demand. However, if the percentage of renters is substantial and DOM is low, indicating quick turnover, then demand is likely strong. Conversely, high DOM suggests slower demand, which could impact your ability to lease out the property promptly.
To make an informed decision, you must first determine if the FMR of $1360 is adequate to cover your debt service. Next, compare the market rent to the FMR to gauge potential returns. Lastly, assess the local rental market's strength by looking at the percentage of renters and DOM. These steps will guide you toward a profitable investment strategy in ZIP 36536.
Data Sources: FMR data from HUD (2027).
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.