Location: Washington County, AL | Metro: Washington County, AL
| Unit Size | Monthly FMR |
|---|---|
| Studio | $700 |
| 1 Bedroom | $740 |
| 2 Bedrooms | $920 |
| 3 Bedrooms | $1,210 |
| 4 Bedrooms | $1,540 |
| 5 Bedrooms | $1,786 |
| 6 Bedrooms | $2,000 |
| 7 Bedrooms | $2,160 |
| 8 Bedrooms | $2,268 |
U.S. Census Bureau data (2024)
The analysis for ZIP code 36584 reveals a complex picture regarding potential Section 8 investments. With an annualized Fair Market Rent (FMR) for a two-bedroom apartment set at $960 for fiscal year 2024, the implications for gross yield must be considered against the backdrop of the area's median home value, which is currently not available.
In the scenario where the median home value is unknown, we can still derive some insights. Assuming the typical market dynamics, if the median home value were hypothetically $150,000, the annual rental income from a two-bedroom unit under Section 8 would represent a gross yield of approximately 7.7%. This is calculated by taking the annual rental income ($960 * 12 months = $11,520) and dividing it by the hypothetical home value ($150,000).
However, without a specific median home value, a direct comparison to market rents is challenging. The lack of market rent data for ZIP 36584 suggests that either the rental market is underdeveloped or there is insufficient data to provide a reliable figure. In such a case, the focus should be on the existing Section 8 parameters rather than speculative market comparisons.
The renter density of 12.0% indicates a relatively low proportion of renters in the area, which could affect the demand for rental properties, including those participating in the Section 8 program. Given this low renter density, landlords and small-portfolio investors should consider the potential for longer days on market (DOM), although the exact DOM figure is also not available. A higher DOM could imply slower property turnover and potentially less favorable cash flow scenarios.
Despite these uncertainties, the Section 8 FMR provides a stable and predictable source of income, which is particularly valuable in areas with volatile rental markets or economic instability. The 7.7% gross yield derived from the FMR is a conservative estimate and should be viewed alongside other investment criteria such as maintenance costs, vacancy rates, and local property management fees.
In conclusion, while the exact market conditions are unclear due to missing data points, the Section 8 program offers a secure rental income stream. The gross yield calculation based on the FMR gives a clear benchmark for evaluating the potential returns, even if the overall market context remains ambiguous.
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.