1st Advantage MortgageDecatur is a AL market where the rent-to-payment ratio decides the loan. Median rent is $896, median home value is $210,200 and 37% of households rent.
Market snapshot for Decatur
Two Census medians frame the Decatur rental market: gross rent of $896 a month, which is about 11% below the Alabama median of $1,007, and a home value of $210,200, which is close to the Alabama median of $209,900. A quick screen: twelve months of Decatur median rent over its median home value equals 5.1%, a lean ratio that leaves little room for taxes, insurance and dues. Use it to compare markets, then replace it with real rent evidence for the address.
| Indicator | Alabama | Decatur | Difference |
|---|---|---|---|
| Persons per household | 2.48 | 2.38 | |
| Share in 2-4 unit buildings | 4.8% | 5.4% | +14% |
| Share of homes detached | 69.1% | 69.9% | +1% |
| Long commuters, 45 min plus | 14.7% | 10.7% | -27% |
| Degree holders, age 25+ | 28.4% | 22.4% | -21% |
| Workers on their own account | 9.1% | 8.0% | -13% |
| Units sitting vacant | 14.5% | 6.9% | -53% |
| Typical construction year | 1986 | 1977 | |
| Annual rent divided by value | 5.8% | 5.1% | -11% |
| Households that rent | 29.8% | 36.7% | +23% |
| Tax as a share of home value | 0.38% | 0.36% | -5% |
| Annual property tax bill, median | $788 | $751 | -5% |
| Household income, median | $63,999 | $61,563 | -4% |
| Typical monthly rent | $1,007 | $896 | -11% |
| Residents (Census estimate) | 5,086,768 | 57,361 |
The renter share is 36.7% in Decatur, about 23% above the Alabama median of 30%, a sizable rental market. Household income runs a median $61,563 (close to the Alabama median of $63,999), while 46% of renters spend 30 percent or more of income on housing.
Housing stock and vacancy in Decatur
Single-family detached housing accounts for 70% of the units counted in Decatur, so expect house-style comparables in most appraisals. Median year built is 1977, so many homes are reaching the age when major systems need replacing.
Roughly 7% of units in Decatur sit vacant, and the share of rentals available for rent is 4.7% at the survey's snapshot.
Reading Decatur as an investor
With only 5.1% gross yield, Decatur buyers often rely on appreciation as part of the plan, and a lender will want the ratio to clear without it. With a 1977 median build year, the question for each property is when the roof and HVAC were last replaced. Renters are 37% of households, which gives investors a real tenant base to market to.
Taxes, insurance and hazards in Decatur
Real estate taxes are a line the rent has to cover. The median owner in Decatur pays $751 a year (close to the Alabama median of $788), which is about 0.36% of the median home value. Set beside the median rent, the tax alone consumes about 7% of annual rent.
For hazards, FEMA's National Risk Index puts Morgan County at a relatively moderate overall rating, and its top-ranked hazards are tornadoes (relatively high), lightning (relatively high) and strong wind (relatively high).
| Hazard in Morgan County, FEMA index | Level |
|---|---|
| Earthquakes exposure | Relatively Moderate |
| Strong wind exposure | Relatively High |
| Lightning exposure | Relatively High |
| Tornadoes exposure | Relatively High |
| Social vulnerability score | Relatively High |
| Annualized loss estimate | Relatively Moderate |
| Composite risk | Relatively Moderate |
Flood risk in Decatur is parcel by parcel: check the address on FEMA's flood map service, because a mapped high-risk zone means required flood cover and a heavier payment.
The ratio in Decatur dollars
Worked through with this city's own medians: rent of $896 against taxes of about $63 a month leaves $833 for principal, interest, insurance and dues at a 1.00 ratio, and $654 at a 1.25 ratio. That arithmetic is the whole game, and the real rent and quotes for your address replace these medians.
Legal checks before a Decatur purchase
Rental registration, inspection and nightly-stay rules differ by city, and we have not verified Decatur's from a municipal source. A short call to the city and Morgan County before you make an offer is cheap insurance. Guests who book by the night in Decatur are taxed under state law as follows. Alabama's state lodgings tax applies to short-term rentals of less than 180 continuous days, and counties and cities may add their own lodging taxes with rates and filing rules that vary by locality.
The return clock runs 60 days from move-out in Alabama, so Decatur landlords should keep move-in photos and repair receipts.
Where Decatur sits among nearby places
Set Decatur ($210,200 median value) beside its neighbors: Florence comes in lowest at $196,300, and Madison tops the group at $398,800.
| Market | Renter share | Tax bill | Home value | Residents | Rent |
|---|---|---|---|---|---|
| Florence | 48% | $845 | $196,300 | 41,701 | $820 |
| Huntsville | 42% | $1,345 | $293,600 | 222,791 | $1,171 |
| Madison | 26% | $1,994 | $398,800 | 60,106 | $1,453 |
| Decatur | 37% | $751 | $210,200 | 57,361 | $896 |
What fills Decatur rentals
Roughly 8.0% of employed people in Decatur are self-employed, a base of investors and landlords for whom a rent-based loan is a practical option. Around the edges, government workers are about 12% of employment, 22% of adults hold a bachelor's degree or higher and 11% of commuters travel 45 minutes or more.
The Decatur area is home to Calhoun Community College. Students and employees at schools like these are a recurring source of rental demand. Transportation links include interstate access via I-65 and I-565 and air service through Huntsville International Airport and Birmingham-Shuttlesworth International Airport. Easy highway and air access helps both tenant commutes and remote ownership.
Before you make an offer in Decatur
Ready to test a Decatur deal? Use the calculator for the ratio, then start your application or send us the scenario.
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Where these facts come from
- Decatur overview (Wikipedia)
- Decatur landlords: see Ala. Code 35-9A-201(a)-(f)
- Alabama Department of Revenue, lodgings tax
- American Community Survey tables, Alabama
- FEMA county hazard table
We took the Decatur data from Census ACS five-year tables for 2020 to 2024, estimates with margins of error. Landlord rules for Decatur rest on Alabama statutes and the CC BY 4.0 RedFlagLease dataset. Reviewed in October 2026, with no promise that rules have stayed put.
Quick file checklist
Before you commit on a Decatur deal, confirm the rent with the lease or a market estimate, price the insurance for the exact address, and check how the taxes may change after the sale, so the ratio you run matches the one the lender calculates.
DSCR loan availability varies by property and lender program and is not an offer to lend. See our disclosures.
Frequently asked questions
What rent do DSCR lenders use for a Decatur rental?
It comes from a lease or from the market rent in the appraisal, whichever the program uses. Against that, the Decatur median is $896.
How much payment fits the median Decatur rent?
They do. Rent of $896 divided by 1.25 gives about $717 as the payment ceiling, and $63 of that is spoken for by the median Decatur tax bill.
Are Decatur property taxes high for Alabama?
The Census reports a median of $751 a year for Decatur owners, about 0.36% of median value against 0.38% for Alabama. The county reassesses after a sale, so ask the tax office for an estimate on your purchase price.
Can I use Airbnb income to qualify in Decatur?
Often, with conditions: legal use under city and association rules, documented income and an insurance policy that covers guests. Decatur owners should check all three first.
What deposit rules apply to a AL rental?
A landlord has 60 days to return the deposit. Both come from Ala. Code 35-9A-201(a)-(f).
What hazard risk does Decatur carry for investors?
FEMA's index puts the county at relatively moderate overall. A lender cares about the premium and any flood requirement, which are address-specific in Decatur.
How do LLC closings work for Decatur rentals?
Many Decatur investors do, though no rule forces it. The loan is secured by the property either way, and the lender will check who controls the company.