Birmingham, AL Is there any money to be made?

5 Replies

Looking into some opportunities in Birmingham.  This looks very different from most of the Texas markets as it appears the rents can actually support investing there. 

If you are in the Birmingham market:

How is the local economy?

How is the rental market?

What areas of town would you avoid investing in?

Thanks to all who answer!

I am a real estate attorney who represents a lot of investors who purchase in Birmingham...... it seems to be a very active real estate market for the real estate investors (both local people and out of town investors are buying here).   I am told that the rental rates are good; and the economy has not been as affected as much as other areas of the country.    

Birmingham really a buy and hold market for the last several years and continues to do so. Economy is strong and being a conservative area, we do not have a high foreclosure rate. No wild swings in appreciation and it holds steady at a conservative 1.76% yearly.

As for rental rates, really depends on the areas you want to be in.
1. High cap rates of 12%+ will put in you low income C class areas with higher risk tolerance and less appreciation. Rents will be in the $600-800 range.
2. Cap rates of 10% and below will put in you high C/B class areas with better tenants and a bit more appreciation. Rents in the $800-1100 range.

Many investors here diversify their portfolio with a mixture of both B and C class SFH properties. They key is working with a strong local turnkey provider who can assist you in choosing the right properties and insuring you have a firm foundation.

Most importantly, we recommend investors hold on to their investments for a minimum of 5-8 years to really maximize returns.

Always recommend coming to Birmingham to meet with your potential TKP's and do you due diligence.

Let me know if I may be of further assistance.

Hi @Roy Oliphant

Birmingham is a very good market for buy-and-hold real estate investing.  There is a wide range of property values and returns to be found.  It has gained more attention from investors over the last year.

Here are some quick facts:  

  • 8th Hottest Housing Market for 2014 (CNN/Money).
  • Winner of the 2021 World Games.
  • Law, medicine, nursing & engineering hub.
  • Capitalization rates up to 15.0% (area specific).
  • Ranked #2 for lowest property taxes.
  • 2014 median price increase of 12.8%.
  • 3-Year appreciation forecast of 10.6%.

Continued success!