What are the zip codes to avoid in Montgomery and Burmingham AL?

Question

I am a first timer in RE investment and researching various markets. Due to attractive property tax and tenant laws, I am looking at some markets in Alabama as well.

What are B+ zip codes in Montgomery and Birmingham? And more importantly what are the zip codes to avoid.

John Patton · Answer

Do you want to know what a neighborhood or zip code is like. Go ride in that area between noon and 3 pm. See if any of the houses are burned out or boarded up. Or if there people hanging out besides kids and should be working. Is so leave and don’t come back. If you don’t see the boarded up or burned out then stop and ask about the neighborhood with postal workers and or utility workers . These folks are on these streets every day and they know what is going on.

Talk to local investors that know the neighborhoods not people hundreds of miles away from the area you are looking at. Good luck JP

Talk to local investors that know the neighborhoods not people hundreds of miles away from the area you are looking at. Good luck JP

John Patton · Answer

The only areas I would look at in Birmingham/ western Jefferson county are  homes  with Hueytown 35023 schools and McCalla 35111  with Mcadory high school. Not Bessemer schools. The demand for homes are here because the auto related jobs to Mercedes are there.

Good luck JP

JC Castillo · Answer

Hi Parth,

I don't know about Birmingham but in Montgomery I like to narrow my search to streets and neighborhoods, rather than zip codes. Typically, the further east you go, the higher rents you can get (and I'm saying typically because is not always the case).

However, there are some honey hole neighborhoods that I specifically keep and eye on (Forrest Hills, Dalraida, Green Acres, etc.).

Since I am an out of state investor as well, I rely a lot in my Realtor and my PM to let me know if I property will be a good investment or not.

I hope this helps.

JC

Melissa Nash · Answer

@Parth Patel I think that question is assuming that other investors have the same risk threshold as you do and that everyone grades properties the same. They don't- everyone has personal bias.  I have a $40k property in Birmingham  that has a section 8 tenant and isn't the "best area" but its my highest performing property. So, I would buy a similar property there again. Another way of looking at the grading system is the type of tenant for the price. For example if rents are under $800/mo it is very likely this tenant will be section 8- ( I think that is a good thing - as I like section 8) If the tenant is paying $950 + you start getting into renters that have slightly higher income and so on. I determine areas and risks by the tenant pool and their risks. This seems to be more realistic in these areas. Area codes in these areas aren't the best way to evaluate as one neighborhood would be $1000+ rents and the neighborhood next-door is $850/mo rents. So it really is hard to look at zip code only.

What are the zip codes to avoid in Montgomery and Burmingham AL?

Most Popular Reply