Sell Your Commercial Property In Huntsville, AL

Who rents in Huntsville

The 2020–2024 American Community Survey counts 222,791 people in Huntsville and 39,770 renter households, 41.7% of all occupied homes. Across Madison County the renter share is only 31.7%, and statewide it is 29.8% (ACS), so the city holds a disproportionate share of the county's tenants. Median household income in Huntsville is $74,714, below the county's $86,499 and far below the $134,655 reported for the suburb of Madison, but well above the Alabama median of $63,999.

The employer base is unusually concentrated in federal and technical work. The Army describes Redstone Arsenal as hosting a government and contractor workforce of 36,000 to 40,000 people on an average day; the installation began in 1941, when the Army bought 50 family farms covering 38,000 acres. Its tenants include NASA's Marshall Space Flight Center, the Army's Aviation and Missile Command and the Missile Defense Agency. The 2005 base realignment round moved Army Materiel Command and other headquarters to the arsenal and, by the Army's count, added 1,655 civilian and military positions. Next door, Cummings Research Park says 300 companies and organizations operate in the park. Production jobs add a second layer: Mazda Toyota Manufacturing lists 4,000 jobs and annual capacity of 300,000 vehicles.

That mix produces salaried renters whose demand follows federal and contractor hiring, which is why access to the arsenal gates and the research park matters when tenants choose a building.

Rents and affordability

Median gross rent in Huntsville is $1,171, against $1,209 for Madison County and $1,007 for Alabama. Rent burden is moderate for a city of this size: 42.9% of renter households spend 30% or more of income on rent and utilities, and 8,416 households, about 21.2%, spend half or more. For an owner, that cushion means renewal increases meet less resistance than in lower-income Alabama markets, though it also means tenants have options in newer suburban product.

HUD's FY2026 Fair Market Rents for the metro sit close to the census median at the one-bedroom level and above it for larger units:

Source: HUD Fair Market Rents, Huntsville, AL MSA. FMRs are a metro-wide benchmark used for housing vouchers, not a survey of market asking rents, but they are a useful check on whether a rent roll is below the area norm.

The apartment stock

Huntsville has 104,388 housing units. Detached single-family homes account for 65,895, or 63.1%, and two- to four-unit buildings add 8,071. Buildings with five or more units hold 25,429 units, 24.4% of the stock, compared with 16.6% countywide and 11.7% statewide. The split by size shows a market built around mid-size complexes: 9,167 units sit in buildings of 5 to 9 units, 7,098 in buildings of 10 to 19, 4,130 in buildings of 20 to 49, and 5,034 in properties of 50 or more. The median housing unit was built in 1985, so a large share of rentals are now 30 to 50 years old and due for roofs, HVAC and unit interiors.

Submarkets behave differently. South Huntsville sits between downtown and the arsenal and holds much of the city's older rental stock. The city of Madison to the west is newer and has a renter share of only 26.0% (ACS), so investors there compete with ownership. Athens and Decatur are separate cities in Limestone and Morgan counties with their own millage, so a portfolio that spans them carries several tax rates.

Huntsville's share of the county rental market

Comparing the city with Madison County as a whole shows how concentrated apartment ownership is. The county has 52,297 renter households; 39,770 of them, about 76%, live in Huntsville. Of the county's 29,717 units in buildings of five or more, 25,429, or roughly 86%, are inside the city, and Huntsville holds 5,034 of the county's 5,853 units in properties of 50 or more. The county's housing is also newer, with a median year built of 1992 against the city's 1985. For a seller, that means most buyers looking for scale in the county end up shopping inside Huntsville, while newer suburban complexes set the quality bar tenants compare against.

Property taxes on apartment buildings in Madison County

Alabama classes rental apartments as Class II property, assessed at 20% of appraised value (Alabama Department of Revenue). The tax is that assessed value times the local millage. According to the state's October 2025 millage table, a parcel inside Huntsville and its school district in Madison County pays 6.5 state mills, 11.0 county mills, 5.5 school mills and the city's 35.0 mills, of which 22.0 are earmarked for education, for a total of 58.0. A building appraised at $3 million is assessed at $600,000 and would owe about $34,800 a year at that rate. Spread across 40 units, that is about $870 per unit per year. The same city levy is 35.0 mills in Limestone County but 23.7 mills in the Morgan County sliver of Huntsville, so the county matters.

Two state rules shape what a buyer will pay. First, counties reappraise one quarter of parcels each year, and owners have 30 days after a valuation notice to protest to the Board of Equalization (ADOR). Second, the HB73 cap limits annual growth in taxable assessed value of Class II property to 7% through the fiscal year beginning October 1, 2027, but the cap is removed on a change of ownership (ADOR). A buyer will therefore underwrite taxes on a fresh appraisal near the purchase price, not on your capped value. Alabama's deed tax, $0.50 per $500 of value conveyed, applies on the sale (§ 40-22-1); on a $3 million sale with no existing mortgage carried over, that works out to $3,000.

Landlord rules and local compliance

State law forbids local rent control (§ 11-80-8.1), so Huntsville cannot cap rent increases. Leases fall under the Alabama Uniform Residential Landlord and Tenant Act: the base security deposit is limited to one month's rent, with extra deposits allowed for pets or alterations, and the landlord must refund or account for it within 60 days or owe double the deposit (§ 35-9A-201). For nonpayment, a written notice can end the lease no sooner than 7 business days after the tenant receives it (§ 35-9A-421). Huntsville runs its own business license system through the city finance department; a buyer will ask to see the current license and any open code cases during due diligence.

What this means if you own a building here

Huntsville buildings price off two numbers: a rent roll that can be compared with metro FMRs and nearby comps, and a tax bill that a buyer will recompute at 58.0 mills on a new appraisal. If your rents trail the $1,136 one-bedroom and $1,310 two-bedroom benchmarks and the property is a 1980s or 1990s complex, a buyer will look for upside in renovations; if rents are already at or above those levels, condition and deferred capital items will drive the price. Federal budgets are the demand variable to watch, given how much of the job base sits on the arsenal.

Skyline Capital Investments buys 5+ unit buildings in Huntsville and across Madison County. You can estimate your building's value from net operating income, check cap rate math, or request an offer. If you plan to roll the proceeds into another property, the 1031 exchange calculator shows how much you would need to reinvest to defer the gain, and the capital gains tax calculator estimates the bill if you do not.