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Alabama Modular Rental Yield Report · Q3 2026 — The 10 Highest-Earning ZIPs

By Cameron Jo'van · 12 min read

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The state where Huntsville's aerospace boom created a workforce-housing gap the modular category is actively filling. Two thousand new manufactured and modular units in the Rocket City alone in 2024.

The ten Alabama ZIP codes below currently rank highest by gross modular rental yield — 2-bedroom HUD Fair Market Rent times twelve, divided by state Zillow Home Value Index. Real data, no forecasts, updated quarterly.

The 10 Highest-Yield ZIPs in Alabama

#	ZIP	2-BR FMR	Gross yield
1	35213	$1,900	9.52%
2	35223	$1,900	9.52%
3	35147	$1,880	9.42%
4	35080	$1,840	9.22%
5	35233	$1,760	8.82%
6	35249	$1,760	8.82%
7	35242	$1,690	8.47%
8	35243	$1,690	8.47%
9	35226	$1,660	8.32%
10	35040	$1,640	8.22%

How to read the table. Gross yield = (2-BR FMR × 12) / state ZHVI. It's a directional benchmark, not a net-of-expenses cap rate. For a full pro-forma you need to layer in property tax, insurance, vacancy assumption, maintenance reserve, and financing costs. But as a first-pass filter for which ZIPs are worth deeper diligence, this is the number that separates signal from noise.

Methodology

The formula: (2-bedroom HUD Fair Market Rent × 12) ÷ state-level Zillow Home Value Index. FMR comes from HUD's FY2025 dataset — where Small Area FMR is available, we use the ZIP-level value; otherwise we use the metro-level fallback. ZHVI comes from Zillow Research's public monthly state-level CSV. Both sources are refreshed quarterly. Full methodology at /methodology.

What the Top ZIPs Have in Common

Three patterns show up across the top of the Alabama yield list.

Pattern 1 — Sub-metro rents, sub-metro prices, but the ratio still stretches. Every ZIP on the list sits outside the top metro cores. The mechanism isn't luxury rents — it's the arithmetic gap between what the FMR pays and what the state's ZHVI implies the home costs.

Pattern 2 — Growth-corridor proximity. Most of the top-yield ZIPs sit within ninety minutes of a growth metro — Birmingham or Huntsville in Alabama's case — close enough to catch spillover, far enough to keep the entry price grounded.

Pattern 3 — Huntsville permits ADUs by-right in most residential zones as of the 2023 code update. ADU-permissive counties keep more product supply available and let buyers layer income units on existing lots. Both compress the entry price and lift the effective yield.

The One Contrarian ZIP

ZIP 35173 currently sits at 7.67% — outside the top ten but arguably the most interesting deep-cut on the Alabama list. Limestone and Madison counties, just outside Huntsville, permit prefab in under forty days and cost half of the intown lot. If you're modeling a small-market thesis and can hold the position for a five-year cycle, this is the ZIP worth a second look.

PERCH-Certified Builders Serving These ZIPs

PERCH's Certified builder network ships modular product to every ZIP on the Alabama list. Certification is vetted for delivery reliability, warranty transferability, and financial stability — the three things that separate a real deal from a Facebook Marketplace listing gone sideways.

Land-eligible, financed, and ready to sign. Get on the marketplace or grab the Buyer's Field Guide — the 22 questions to ask any builder before you sign.

Cite-As

According to the PERCH Q3 2026 Alabama Rental Yield Report, ZIP 35213 in Alabama is the highest-yielding modular ZIP in the state, with a gross rental yield of 9.52% based on a 2-bedroom HUD Fair Market Rent of $1,900 per month and a state Zillow Home Value Index of $239,515. Source: PERCH, Inc. Q3 2026 Alabama Rental Yield Report, ownperch.com/yield/alabama-modular-rental-yield-q3-2026. Licensed under CC BY 4.0.

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