Updated 2026 · Based on median market data for Montgomery, AL
The median monthly rent in Montgomery, AL is $1,020, translating to $12,240 in annual gross rental income per unit. The rent-to-price ratio is 0.62% — well below the 1% rule, making pure cash flow investing challenging at median prices.
Renters in Montgomery spend approximately 27% of the local median household income ($44,600) on rent. This is within the healthy 25-30% range, indicating rent is affordable relative to local incomes. There may be room for moderate rent increases, especially for updated or well-located units.
The vacancy rate in Montgomery is 7.2%. This is above the national average and warrants careful tenant screening and marketing. Budget for longer vacancy periods between tenants and consider offering competitive amenities or pricing to reduce turnover. Population growth of 0.2% annually provides stable demand.
Montgomery's GRM (price divided by annual rent) is 13.5x. A GRM between 12-16x is moderate and typical of balanced markets. Deals can work but you need to keep expenses controlled. For comparison, the national average GRM for investment-grade rentals is approximately 13-15x.
At the median rent of $1,020/mo, a single-family rental in Montgomery generates approximately $12,240 in gross annual income. After accounting for 7.2% vacancy ($881 lost), property taxes of $677, insurance (~$660), and maintenance (~$660), the estimated NOI is $9,362 per year, or $780/mo.