Birmingham AL market

[Jay Kaltenbach]

I recently listened to a podcast where the host was saying that Birmingham was a great market, in his opinion, for buying rental property (turn key even) and putting section 8 tenants in them for 9-12% returns.

Does anyone have any experience or opinion about Birmingham and do you know of any good property managers?

[Anton Ivanov]

@Jay Kaltenbach

I bought 3 turnkeys in Birmingham last year. Overall, I think it's a good market with good potential for cash flow. At the same time, I would keep in mind the following:

• There are many areas around downtown which are very high crime, with many abandoned hoses, etc. They may look good on paper, but I would not buy them.
• Section 8 administration is extremely slow with processing new tenants, in my experience. I've had to wait 6-8 weeks to get the tenant approved, get a max-rent letter from the city and get the mandatory Section 8 inspection completed. If this is the route you're going, I strongly suggest budgeting for at least a 15% vacancy rate.
• Most of the houses are old, many older than 1950. With that, you'll get additional maintenance and cap ex expenditures, depending on the specific condition of each house.