Sell Your Commercial Property In Montgomery, AL

Who rents in Montgomery

The 2020–2024 American Community Survey counts 197,494 residents and 81,241 occupied homes in Montgomery, of which 37,052, or 45.6%, are rented. That is far above the statewide renter share of 29.8% (ACS). More striking is the city's weight inside its county: Montgomery County has 38,598 renter households, so about 96% of the county's tenants live in the city, and roughly 98% of the county's units in buildings of five or more are inside city limits. Anyone buying apartments in the county is, in practice, buying in Montgomery.

Median household income in the city is $56,811, a little under the county's $59,386 and below the Alabama median of $63,999. The job base leans on public employment. As the state capital, Montgomery houses state agency headquarters, and Maxwell Air Force Base and its Gunter Annex host Air University and more than 40 mission partners. The base's host wing says it supports more than 42,000 active-duty Airmen and Guardians, reservists, civilians, contractors, students and family members across the River Region. Manufacturing is the other pillar. Hyundai Motor Manufacturing Alabama, the company's first U.S. assembly plant, describes a $1.7 billion facility employing approximately 4,200 people, building the Tucson, Santa Fe and Santa Cruz.

Montgomery against the county and state

The census tables show a city that is older, more rental and more multifamily than Alabama overall. Montgomery's 19.6% share of homes in buildings of five or more units compares with 11.7% statewide, and 3,279 of the county's 3,357 units in complexes of 50 or more are inside the city. Manufactured homes, which make up about 12% of Alabama's housing, account for only 2,120 of the city's 94,580 units. That leaves conventional apartments and single-family rentals competing for the same tenants, so a well-kept small building is measured against rented houses as much as against other complexes.

Rents and affordability

Median gross rent in Montgomery is $1,089, almost identical to the county's $1,092 and above the statewide $1,007. Incomes have not kept the same pace. Of the city's renter households, 49.5% spend 30% or more of income on rent and utilities, and 10,515 households, about 28.4%, spend half or more. That is a heavier burden than the state as a whole, where the 30%-plus share is 42.5%, and it caps how quickly rents can rise at renewal in Class B and C buildings.

HUD's metro Fair Market Rents are lower than the census median at every size up to two bedrooms, which matters for owners who rent to voucher holders:

Source: HUD Fair Market Rents, Montgomery, AL MSA. The census median covers every rental, including single-family houses and larger units, so it naturally sits above the one- and two-bedroom FMRs. A building with a high voucher share will have its rents anchored near these figures.

The apartment stock

Montgomery has 94,580 housing units. Detached houses make up 65,475, or 69.2%, and buildings of two to four units add 5,244. Apartment buildings of five or more units hold 18,517 units, 19.6% of the total. The mix tilts small: 8,988 units are in buildings of 5 to 9 units, 4,290 in buildings of 10 to 19, 1,960 in buildings of 20 to 49, and 3,279 in complexes of 50 or more. In other words, nearly half of the city's apartment inventory sits in fourplex-plus and small walk-up properties, so small-building sales set much of the local pricing.

The median housing unit was built in 1978, older than the statewide median of 1986. The areas we watch most closely sort into two groups for tax purposes. Cloverdale and East Montgomery are inside the city and share its rates, while Pike Road is a separate town with its own school district and Prattville sits across the county line in Autauga County, each with its own levies, as the next section shows.

Property taxes on apartment buildings in Montgomery County

Alabama taxes rental apartments as Class II property, assessed at 20% of appraised value (Alabama Department of Revenue). The state's October 2025 millage table lists, for a parcel inside Montgomery and its school district, 6.5 state mills, 7.5 county mills, 22.0 school mills and 12.5 city mills, a combined 48.5. A building appraised at $2 million has an assessed value of $400,000 and a tax bill of about $19,400 a year, or roughly $485 a unit for a 40-unit property.

Location changes the number. The same table lists the Pike Road school district at 29.0 mills and the Town of Pike Road at 26.0, which with state and county levies totals 69.0 mills. In Prattville, Autauga County's table shows 7.5 county mills inside the city, 10.0 school mills and a 7.0-mill city levy, about 31.0 mills including the state's 6.5. Unincorporated Montgomery County carries a 5.0-mill fire levy that city parcels do not.

Put in dollars for the same $2 million building, those rates work out to roughly $19,400 a year inside Montgomery, $27,600 in Pike Road and $12,400 in Prattville. On a 40-unit property that is a spread of about $380 per unit per year between the highest and lowest of the three, enough to move value by a meaningful amount once a buyer capitalizes the difference into a price.

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). The HB73 cap holds annual growth in taxable assessed value of Class II property to 7% through the fiscal year beginning October 1, 2027, but it is removed on a change of ownership (ADOR). Expect a buyer to underwrite taxes from a fresh appraisal, not from your capped bill. The deed tax is $0.50 per $500 of value conveyed (§ 40-22-1), or $2,000 on a $2 million sale with no assumed mortgage.

Landlord rules and local compliance

Alabama bars local rent control (§ 11-80-8.1). Leases fall under the Alabama Uniform Residential Landlord and Tenant Act: a base security deposit of no more than one month's rent, with extra deposits allowed for pets, alterations or added liability; a refund or itemized accounting within 60 days after the tenant leaves, or double the deposit (§ 35-9A-201); and, for unpaid rent, a written notice that can end the tenancy no sooner than 7 business days after the tenant receives it (§ 35-9A-421). With nearly half of renters cost-burdened, collections and turnover costs are the operating lines a buyer will study most closely in a Montgomery rent roll.

What this means if you own a building here

Montgomery's strengths are a deep renter base concentrated in one city, steady public and military employment, and a combined millage that keeps taxes per unit low. Its constraints are incomes that limit rent growth and a housing stock whose median unit is close to 50 years old. Buyers will look at three things: how your rents compare with the $870 one-bedroom and $1,016 two-bedroom FMRs, the age of roofs, plumbing and HVAC, and whether the building sits inside the city, in Pike Road or in Prattville, since that sets the tax line.

Skyline Capital Investments buys 5+ unit buildings in Montgomery and the surrounding River Region, including small buildings that institutional buyers pass over. You can estimate your building's value, run cap rate math on your current numbers, review how net operating income drives price, or request an offer.