Location: Daphne-Fairhope-Foley, AL | Metro: Daphne-Fairhope-Foley, AL MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,280 |
| 1 Bedroom | $1,430 |
| 2 Bedrooms | $1,560 |
| 3 Bedrooms | $2,020 |
| 4 Bedrooms | $2,550 |
| 5 Bedrooms | $2,958 |
| 6 Bedrooms | $3,313 |
| 7 Bedrooms | $3,578 |
| 8 Bedrooms | $3,757 |
U.S. Census Bureau data (2024)
The ZIP code 36542, which includes Gulf Shores, AL, within the Daphne-Fairhope-Foley, AL Metropolitan Statistical Area (MSA), is best suited as a cash-flow anchor in a Section 8 portfolio strategy. This classification is based on the financial metrics available for the area. The Fair Market Rent (FMR) for a one-bedroom unit in ZIP 36542 for fiscal year 2024 is set at $1420, slightly above the market rate of $1412. Given the median home value of $455,613, the rental income generated through Section 8 can provide a steady and reliable source of cash flow.
Despite the higher median home value, the area maintains a healthy renter share of 27.4%, indicating a stable demand for rental properties. Additionally, the median income of $79,639 suggests that residents have the financial capacity to afford housing costs, further supporting the reliability of rental income. However, the 0.2% price-cut share and 83-day days on market (DOM) indicate a competitive market where properties might take longer to sell if the landlord decides to exit the rental market.
With these factors in mind, Gulf Shores serves as a strong anchor for a Section 8 portfolio due to its ability to generate consistent rental income, albeit with a modest spread of $8 between the FMR and the market rate. Landlords and small-portfolio investors should consider this area for its stability and potential to offset risks associated with other parts of their investment portfolios.
Data Sources: FMR data from HUD (2027). 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.