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 | $920 |
| 1 Bedroom | $960 |
| 2 Bedrooms | $1,120 |
| 3 Bedrooms | $1,450 |
| 4 Bedrooms | $1,540 |
| 5 Bedrooms | $1,786 |
| 6 Bedrooms | $2,000 |
| 7 Bedrooms | $2,160 |
| 8 Bedrooms | $2,268 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,120 | $122,364 | 0.92% | C |
| 3BR | $1,450 | $211,164 | 0.69% | D |
| 4BR | $1,540 | $299,324 | 0.51% | F |
U.S. Census Bureau data (2024)
The potential risks associated with investing in Section 8 properties in ZIP code 36587 in Wilmer, AL, are significant. First, consider the disparity between the market rent of $1,131 and the Fair Market Rent (FMR) set at $970 for fiscal year 2024. This difference can lead to higher tenant turnover, as the FMR may not cover the full cost of renting, making it difficult for tenants to afford the market rate.
Vacancy exposure is another critical issue. The Days on Market (DOM) for this area is not available, which suggests a lack of transparency or data regarding how long properties typically remain vacant before being rented. This uncertainty can pose a substantial risk, as prolonged vacancies mean lost revenue for the landlord.
Deferred maintenance is also a concern. With an average home value of $199,451 and a median household income of $72,657, many property owners might struggle to keep up with necessary repairs and renovations. This financial strain can result in properties falling into disrepair, leading to increased costs and potential safety hazards for tenants.
However, these risks must be weighed against the high concentration of renters in the area. The renter share is 13.2%, indicating a robust demand for rental properties, especially those that accept Section 8 vouchers. High renter density often translates to a steady stream of potential tenants, reducing the likelihood of extended vacancies and increasing the chances of finding stable, long-term residents.
In conclusion, the investment risk for a first-time Section 8 landlord in ZIP code 36587 is moderate. While there are notable challenges, such as tenant turnover and deferred maintenance, the strong renter market offers some mitigation against these risks.
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.