1st Advantage MortgageInvestors buying in Florence, AL are measured on the rent the property earns. Locally, median gross rent is $820 and median real estate taxes are $845 a year, which together set how much loan a rent can carry.
What the numbers say about Florence
Median gross rent in Florence: $820, about 19% below the Alabama median of $1,007. Median owner-occupied home value: $196,300, close to the Alabama median of $209,900. Those are citywide medians, so an individual address can sit well on either side of them. By the simple measure of annual rent over home value, Florence sits at 5.0%, a lean ratio that leaves little room for taxes, insurance and dues. Lenders do not underwrite a ratio like that, but investors use it to decide where to look first.
| Indicator | Alabama | Florence | Difference |
|---|---|---|---|
| Tax as a share of home value | 0.38% | 0.43% | +15% |
| Annual property tax bill, median | $788 | $845 | +7% |
| Household income, median | $63,999 | $52,174 | -18% |
| Typical owner-occupied value | $209,900 | $196,300 | -6% |
| Typical monthly rent | $1,007 | $820 | -19% |
| Persons per household | 2.48 | 2.19 | |
| Share in 2-4 unit buildings | 4.8% | 10.3% | +117% |
| Share of homes detached | 69.1% | 64.3% | -7% |
| Long commuters, 45 min plus | 14.7% | 8.8% | -40% |
| Degree holders, age 25+ | 28.4% | 34.5% | +22% |
| Workers on their own account | 9.1% | 8.3% | -9% |
| Renters paying 30%+ of income | 48.8% | 40.2% | -18% |
| Typical construction year | 1986 | 1973 | |
| Annual rent divided by value | 5.8% | 5.0% | -13% |
| Households that rent | 29.8% | 47.9% | +61% |
| Residents (Census estimate) | 5,086,768 | 41,701 |
Tenure in Florence is split fairly evenly: 47.9% renter-occupied and 52% owner-occupied, with the renter share well above the Alabama median of 30%. The median household brings in $52,174 (about 18% below the Alabama median of $63,999), with 40% of renters paying 30 percent or more of income toward rent.
Property types and condition in Florence
Florence is dominated by detached homes (64% of units), which keeps most rental income tied to house comparables and puts maintenance squarely on the owner. The median home was built in 1973, a middle-aged stock where roofs, HVAC and water heaters are the main repair items.
The Census counts 12% of Florence housing units as vacant, with a rental vacancy figure of 6.7%.
Underwriting angles in Florence
A gross yield of 5.0% means Florence is a market where purchase prices run ahead of rent, so a 1.0 ratio generally takes a larger down payment or a property priced below the local median. A median build year of 1973 suggests moderate repair budgets with the usual replacement cycles. A 48% renter share is large enough to keep units leased, so location relative to jobs and schools drives rent more than the market as a whole.
The payment side of the Florence ratio
Tax drag is easy to underestimate. Florence owners report a median $845 in annual real estate taxes, close to the Alabama median of $788, an effective 0.43% of median home value. Compared with annual median rent, the tax line is about 9%.
County-level hazard data from FEMA (National Risk Index 1.20) shows Lauderdale County with relatively moderate overall risk and strong wind (relatively high), cold waves (relatively high) and tornadoes (relatively high) at the top of the list.
| Hazard in Lauderdale County, FEMA index | Level |
|---|---|
| Lightning exposure | Relatively High |
| Tornadoes exposure | Relatively High |
| Cold waves exposure | Relatively High |
| Strong wind exposure | Relatively High |
| Social vulnerability score | Relatively Moderate |
| Annualized loss estimate | Relatively Moderate |
| Composite risk | Relatively Moderate |
Insurance belongs in the ratio from day one, so get a landlord quote for the Florence address and ask about roof age, wind or hail deductibles and flood cover.
What the Florence medians allow
At the city medians a DSCR file in Florence has $750 a month after taxes to cover principal, interest, insurance and dues if the ratio is 1.00, or $586 if the ratio is 1.25. Those two numbers show why insurance quotes and tax estimates come first.
Registration, deposits and nightly stays in Florence
Local rental rules in Florence are not summarized here because we could not verify them from a city source. Ask the city and Lauderdale County about registration, inspection and short-term rental requirements, and confirm what an HOA allows. For Florence short-term hosts, one state-level point stands out. 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.
Alabama gives a landlord 60 days after the tenancy ends to return a deposit, an easy deadline to miss without a checklist.
Florence compared with nearby markets
Of the cities listed, Madison is the most expensive ($398,800 median value) and Decatur the least ($210,200); Florence sits at $196,300.
| Market | Renter share | Tax bill | Home value | Residents | Rent |
|---|---|---|---|---|---|
| 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 |
| Florence | 48% | $845 | $196,300 | 41,701 | $820 |
Workforce and demand drivers in Florence
About 8.3% of Florence workers are self-employed, the kind of borrowers whose tax returns understate cash flow and who often prefer a loan sized on rent. Other workforce markers: government workers are about 17% of employment, 35% of adults hold a bachelor's degree or higher and 9% of commuters travel 45 minutes or more.
Higher education in and around Florence includes University of North Alabama, which feeds demand for student, staff and faculty housing near campus. On the logistics side, interstate access via I-65 and air service through Northwest Alabama Regional Airport and Charlotte Douglas International Airport are noted for Florence.
Next steps for a Florence purchase
Bring the Florence numbers to a loan officer: the rent, the taxes, the insurance and your reserves. Apply online or ask for a quote, and use the calculator to preview the ratio.
More Alabama markets
- All Alabama DSCR loans
- DSCR loans in Decatur, AL
- DSCR loans in Madison, AL
- DSCR loans in Huntsville, AL
- Every market we cover
Sources and data notes
- 2020 to 2024 ACS data used for Florence
- Federal hazard index, AL
- Wikipedia article, Florence, Alabama
- Text of Ala. Code 35-9A-201(a)-(f) for Florence landlords
- For nightly stays in Florence: Alabama Department of Revenue, lodgings tax
All Florence statistics are ACS five-year survey estimates from 2020 to 2024. For Alabama tenant law we used RedFlagLease under CC BY 4.0 plus the linked statutes. Last reviewed October 2026; the city and county have the final word on Florence rules.
A short buyer checklist
On a Florence purchase, line up the lease, the tax estimate, the insurance quote and any association dues before the appraisal is ordered, and ask the appraiser's office what rent comparables they plan to use.
DSCR loan availability varies by property and lender program and is not an offer to lend. See our disclosures.
Frequently asked questions
How does a lender pick the rent for a Florence DSCR file?
Underwriters take the lease if one exists and compare it with the appraisal's rent estimate; the lower figure often governs. Florence median rent is $820.
How is the DSCR figure built for a Florence property?
Every piece of PITIA is in the denominator. With $820 in rent, a 1.25 lender allows about $656, leaving $586 after median taxes of $70 a month.
What tax bill should I expect on a Florence rental?
The median bill is $845, an effective rate near 0.43%. Because Lauderdale County may reassess at sale, use an estimate on the new price when you run the ratio.
Will a lender count nightly rental income at a Florence property?
Possible where lender guidelines allow it, subject to Florence and Lauderdale County rules and to the building's association. Lenders usually average a year of bookings and discount the result.
What are the security deposit rules for a Alabama landlord?
Landlords in Florence follow Ala. Code 35-9A-201(a)-(f). Return deadline: 60 days from move-out.
How exposed is Florence to natural hazards?
Overall risk is rated relatively moderate for the county. Because the rating covers a whole county, look up the specific property on FEMA's flood map before you offer.
Should a Florence rental be bought in an LLC?
No, but it is common. Entity borrowers supply articles, an operating agreement and an EIN letter, and the owners typically guarantee the loan. A Alabama attorney can advise on structure.