Location: Chambers County, AL | Metro: Auburn-Opelika, AL HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $830 |
| 1 Bedroom | $1,090 |
| 2 Bedrooms | $1,200 |
| 3 Bedrooms | $1,460 |
| 4 Bedrooms | $1,660 |
| 5 Bedrooms | $1,926 |
| 6 Bedrooms | $2,157 |
| 7 Bedrooms | $2,330 |
| 8 Bedrooms | $2,447 |
U.S. Census Bureau data (2024)
To determine if you should buy in ZIP code 36852 for Section 8 investment, follow this decision tree:
1) Does the Fair Market Rent (FMR) of $1100 cover the debt service on a property valued at $274,719?
If the annual debt service is less than $13,200 ($1100 x 12 months), then the answer is yes. For instance, if the mortgage payment is around $700 per month, the total annual debt service would be approximately $8,400, which is well under the FMR threshold.
If the annual debt service exceeds $13,200, then the answer is no. For example, if the monthly mortgage payment is $1,200, the annual debt service would be $14,400, making it unprofitable to rely solely on Section 8 tenants.
2) Is the market rent of $847 above, at, or below the FMR?
If the market rent is below the FMR, then the answer is yes. The gap between the market rent and the FMR can provide a buffer for profitability. In ZIP 36852, the market rent is $847, which is below the FMR of $1100, indicating that landlords could potentially benefit from the higher subsidy rate.
If the market rent is above or equal to the FMR, then the answer is no. This suggests that landlords might struggle to find tenants willing to pay the lower Section 8 rates when they could pay more on the open market.
3) Are 12.7% of the residents renters and do the days on market (DOM) indicate sufficient demand?
The percentage of renters at 12.7% is relatively low. However, the data does not specify the DOM, making it difficult to assess demand accurately. Assuming the DOM is short (indicating high demand), the answer is yes. Short DOM periods suggest that rental properties are quickly occupied, which is beneficial for maintaining a steady income stream.
If the DOM is long (indicating low demand), then the answer is no. Long DOM periods suggest that there is insufficient demand for rental properties, which could lead to prolonged vacancies and financial instability.
In summary, the viability of investing in ZIP 36852 for Section 8 properties hinges on the answers to these three questions. Ensure your debt service is covered by the FMR, confirm that the market rent is below the FMR, and verify that the DOM indicates sufficient demand despite the relatively low renter population percentage.
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.