Out-of-State Investor Exploring Birmingham Section 8 – Demand, Pop Growth & Property

Birmingham, Alabama
General Real Estate Investing
10moFollow

Out-of-State Investor Exploring Birmingham Section 8 – Demand, Pop Growth & Property

Juan Carlos Flores Garcia
Member since 2021 · 33 posts · 11 votes

Hi everyone, I’m looking into investing in single-family rentals in the Birmingham, AL area and potentially focusing on Section 8 rentals. I’d appreciate real-world feedback from anyone familiar with the market there.

  1. Section 8 Demand:
    How strong is the demand for Section 8 rentals in Birmingham/Jefferson County right now? Do Housing Authorities have long waitlists, and are units renting quickly? 

  2. Has anyone noticed population growth or rental stability in the metro area (not just downtown)? Are certain ZIP codes or neighborhoods better for long-term renters vs. others? (Jefferson County itself has ~670,000 people and the broader metro is over 1.1 M) 
  3. Supply & Saturation:
    Is the Section 8 market saturated in Birmingham due to past investor activity? Are there streets/areas worth avoiding entirely because of crime or oversupply? Heard that investor buys have increased competition and tenant wear/tear in some areas.
  4. Property Management:
    Which local property management companies have you used that are good with Section 8 properties? Any that do accept Section 8 and work closely with Housing Authorities? (I’ve seen some mentions of First Choice and others.)
  5. Evictions & Operations:
    For out-of-state owners: How are evictions handled and how responsive are managers with tenant issues? Any experiences with timelines or difficulties getting issues resolved? 
  6. Best ZIP Codes:
    Are there particular ZIP codes in Birmingham that you’ve found cheap properties (<~$100k) that still generate strong rents or Section 8 payment standards?
  7. General Advice:
    Any advice on working with the Housing Authority (HABD, Bessemer, JC Housing) and getting units approved fast?

Thanks in advance — looking to connect with local experts or investors familiar with Birmingham.

4Reply
1,975 views

Most Popular Reply

Bryan HartlenPro Member
Investor · Phoenix, AZ · Member since 2018 · 316 posts · 159 votes
10mo

@Juan Carlos Flores Garcia we are OoS investors who have had rentals in Birmingham area for 8 years so. We had 5 SFRs, all Sec8, and are down to 3 SFRs all private payers. We’re not avoiding Sec8, but we found private payers first when the units turned. 
- demand has always been strong.  
- Administration is slooooooow.  There are 3 housing authorities Jefferson County, Birmingham and I forgot the 3rd.  Doesn’t matter which one you’re dealing with get ready to hurry up and wait.  You or your PM will need to deal with them when you approve a tenant, when they schedule your inspection (before they finalize the tenant for your property) and when you request a rent increase.  Steps 1 and 2 are slow.  Step 3 is glacially slow and often non-existent.  
- I believe the HA’s focus on moving the tenants towards a shared payment model. All of our tenants started as 100% HA payments but moved into shared payment models over time… This adds increased risk to the owner and we did have to turn a couple properties as the tenant couldn’t keep up. 
- For < $100k you will be in D class neighborhood. You cannot buy Sec8 in Birmingham by zipcode or town. It’s be street. You will need someone with local knowledge to help you avoid.
- At this price point (independent of Birmingham location), you’re unlikely to see much appreciation, so modeling focus should be forced appreciation and cashflow.  Rental growth was pretty good while we were there but it’s softened and may have declined. 
- Evictions are advertised as fast in Birmingham.  We’ve found them to be slower than advertised. In the 6 - 8 month range.  Legal side is pretty fast but PM companies have processes they use (to keep from being sued) and the time form judgement to set out was 1 - 2 months waiting for sheriffs.
- We’ve had 3 different property management companies having fired 2 and the current one is so-so. Spend the time interviewing and discussing but realize that no 3rd party is going to treat your property (and tenants) like you would. 
- Going Sec8 will most likely cost you rental income over time (it’s next to impossible to keep up with market rents) BUT you’ll never miss a government payment (we received every dollar through covid). 

Hope that helps.  Good luck.
 

3Reply
See this reply in the discussion

15 Replies

Jump to latestLatest
  • Robert Glover
    Member since 2024 · 9 posts · 3 votes
    10mo

    It would be best to find an investment broker who can source these properties for you and also manage them. I invest as well in AL, and Birmingham is a rough area if I remember correctly. 

    0Reply
  • Jason CoryPro Member
    Real Estate Broker · Birmingham, AL · Member since 2018 · 264 posts · 381 votes
    10mo

    @Juan Carlos Flores Garcia

    As I stated yesterday in a different post for you asking the same thing...

    Keep it simple. You're trying to BRRR low income areas. The value set is not the same as it is in other markets. You want cheap properties but you need to understand that most lenders are not going to refi you or lend to you with a value less than $100k.

    Stay south of the interstate 20/59 corridor. If you try to go north of 20/59, you will run into valuation issues & be stuck. They are also not as desirable. They have more crime as well.

    It's not a zip code buy. It's a zone buy.

    I've held an appraisal license. I've appraised for the housing authority ownership program. I've personally invested. I have a broker's license. I have a PM company. 

    I hope you find the team you are looking for but DO NOT over complicate it

    If you do, Birmingham will spit you out & you will lose a lot of money.

    1Reply
  • Bryan HartlenPro Member
    Investor · Phoenix, AZ · Member since 2018 · 316 posts · 159 votes
    10mo

    @Juan Carlos Flores Garcia we are OoS investors who have had rentals in Birmingham area for 8 years so. We had 5 SFRs, all Sec8, and are down to 3 SFRs all private payers. We’re not avoiding Sec8, but we found private payers first when the units turned. 
    - demand has always been strong.  
    - Administration is slooooooow.  There are 3 housing authorities Jefferson County, Birmingham and I forgot the 3rd.  Doesn’t matter which one you’re dealing with get ready to hurry up and wait.  You or your PM will need to deal with them when you approve a tenant, when they schedule your inspection (before they finalize the tenant for your property) and when you request a rent increase.  Steps 1 and 2 are slow.  Step 3 is glacially slow and often non-existent.  
    - I believe the HA’s focus on moving the tenants towards a shared payment model. All of our tenants started as 100% HA payments but moved into shared payment models over time… This adds increased risk to the owner and we did have to turn a couple properties as the tenant couldn’t keep up. 
    - For < $100k you will be in D class neighborhood. You cannot buy Sec8 in Birmingham by zipcode or town. It’s be street. You will need someone with local knowledge to help you avoid.
    - At this price point (independent of Birmingham location), you’re unlikely to see much appreciation, so modeling focus should be forced appreciation and cashflow.  Rental growth was pretty good while we were there but it’s softened and may have declined. 
    - Evictions are advertised as fast in Birmingham.  We’ve found them to be slower than advertised. In the 6 - 8 month range.  Legal side is pretty fast but PM companies have processes they use (to keep from being sued) and the time form judgement to set out was 1 - 2 months waiting for sheriffs.
    - We’ve had 3 different property management companies having fired 2 and the current one is so-so. Spend the time interviewing and discussing but realize that no 3rd party is going to treat your property (and tenants) like you would. 
    - Going Sec8 will most likely cost you rental income over time (it’s next to impossible to keep up with market rents) BUT you’ll never miss a government payment (we received every dollar through covid). 

    Hope that helps.  Good luck.
     

    3Reply
    • Matthew HeckmanPro Member
      Investor · Member since 2024 · 33 posts · 20 votes
      5d

      Hey Bryan, this is awesome advice, I'm a newer OOS investor looking in Birmingham. As someone who has experience with both section 8 tenants and private payers in the area, would you recommend one vs the other for a new investor? Do you find that the pros of Sec8 outweigh the cons of dealing with the long wait times and difficulties of dealing with JCHA/HABD housing authorities? Thanks in advance for the advice!

      0Reply
  • Michael SmytheBusiness Member
    Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
    10mo

    oh boy, another newbie that thinks S8 will solve all their rental challenges!

    Logical Property Management4.9460 Reviews
    WebsiteView Page
    0Reply
    • Juan Carlos Flores Garcia
      OP
      Member since 2021 · 33 posts · 11 votes
      8mo
      Quote from @Michael Smythe:

      oh boy, another newbie that thinks S8 will solve all their rental challenges!


       Im in texas with section 8 already with portfolio im not a new,  we deal with all the challenges thanks for your support 

      1Reply
  • Hunter TerrynPro Member
    Birmingham, AL · Member since 2021 · 79 posts · 68 votes
    9mo

    @Juan Carlos Flores Garcia 

    Birmingham is still a strong market for S8, we manage a good bit of units that have S8 tenants, and they are generally solid. I also own a rental in East Lake that has had both S8 and traditional tenants and the experience was good with both.

    That said, working for a PM Company has taught me that S8 rentals are not without challenges! I think @Bryan Hartlen did a great job of summarizing his experience above. 

    I'd say my two biggest lessons learned are:
    1. Be EXTREMELY CAUTIOUS underwriting the rental projections based on the HUD website. Those are typically maximum voucher amounts, and some include utility stipends, so it's rare that you get a full voucher amount. It's primarily based on the Tenant's need, not the property. So don't expect just because you have a 4 BR home you'll get the amount shown on the website.
    2. The concept of S8 (and the ultimate goal of the HAs) is to provide a bridge to those in need and get them in a more stable position so they can eventually get off the program. Gurus will hype up the idea that S8 renters renew at a higher rate than traditional renters, which is often true (and a big plus!), but there's trade-offs. Like Bryan alluded to, the rent increases are not typically commensurate with the greater market, so you don't see as much growth. And since there are LIMITED funds/vouchers available in the program, that also means there's a LONG waitlist. Long waitlist does not equal unlimited demand like the gurus say. It just means there's a bunch of folks out there in need that aren't able to make use of the program. 

    All in all, S8 is still a good option, with it's own pros and cons. But these days I don't recommend that an investor base their entire strategy around the program. Ultimately, great rental deals happen at the closing table, and as long as you place great tenants (S8 or not) you'll have a solid investment. 

    [email protected]205-546-2231
    1Reply
    • Juan Carlos Flores Garcia
      OP
      Member since 2021 · 33 posts · 11 votes
      9mo
      Quote from @Hunter Terryn:

      @Juan Carlos Flores Garcia 

      Birmingham is still a strong market for S8, we manage a good bit of units that have S8 tenants, and they are generally solid. I also own a rental in East Lake that has had both S8 and traditional tenants and the experience was good with both.

      That said, working for a PM Company has taught me that S8 rentals are not without challenges! I think @Bryan Hartlen did a great job of summarizing his experience above. 

      I'd say my two biggest lessons learned are:
      1. Be EXTREMELY CAUTIOUS underwriting the rental projections based on the HUD website. Those are typically maximum voucher amounts, and some include utility stipends, so it's rare that you get a full voucher amount. It's primarily based on the Tenant's need, not the property. So don't expect just because you have a 4 BR home you'll get the amount shown on the website.
      2. The concept of S8 (and the ultimate goal of the HAs) is to provide a bridge to those in need and get them in a more stable position so they can eventually get off the program. Gurus will hype up the idea that S8 renters renew at a higher rate than traditional renters, which is often true (and a big plus!), but there's trade-offs. Like Bryan alluded to, the rent increases are not typically commensurate with the greater market, so you don't see as much growth. And since there are LIMITED funds/vouchers available in the program, that also means there's a LONG waitlist. Long waitlist does not equal unlimited demand like the gurus say. It just means there's a bunch of folks out there in need that aren't able to make use of the program. 

      All in all, S8 is still a good option, with it's own pros and cons. But these days I don't recommend that an investor base their entire strategy around the program. Ultimately, great rental deals happen at the closing table, and as long as you place great tenants (S8 or not) you'll have a solid investment. 


      0Reply
    • Juan Carlos Flores Garcia
      OP
      Member since 2021 · 33 posts · 11 votes
      9mo
      Quote from @Hunter Terryn:

      @Juan Carlos Flores Garcia 

      Birmingham is still a strong market for S8, we manage a good bit of units that have S8 tenants, and they are generally solid. I also own a rental in East Lake that has had both S8 and traditional tenants and the experience was good with both.

      That said, working for a PM Company has taught me that S8 rentals are not without challenges! I think @Bryan Hartlen did a great job of summarizing his experience above. 

      I'd say my two biggest lessons learned are:
      1. Be EXTREMELY CAUTIOUS underwriting the rental projections based on the HUD website. Those are typically maximum voucher amounts, and some include utility stipends, so it's rare that you get a full voucher amount. It's primarily based on the Tenant's need, not the property. So don't expect just because you have a 4 BR home you'll get the amount shown on the website.
      2. The concept of S8 (and the ultimate goal of the HAs) is to provide a bridge to those in need and get them in a more stable position so they can eventually get off the program. Gurus will hype up the idea that S8 renters renew at a higher rate than traditional renters, which is often true (and a big plus!), but there's trade-offs. Like Bryan alluded to, the rent increases are not typically commensurate with the greater market, so you don't see as much growth. And since there are LIMITED funds/vouchers available in the program, that also means there's a LONG waitlist. Long waitlist does not equal unlimited demand like the gurus say. It just means there's a bunch of folks out there in need that aren't able to make use of the program. 

      All in all, S8 is still a good option, with it's own pros and cons. But these days I don't recommend that an investor base their entire strategy around the program. Ultimately, great rental deals happen at the closing table, and as long as you place great tenants (S8 or not) you'll have a solid investment. 


      hanks, Hunter — appreciate the transparency. I’m actively investing in Section 8–focused rentals and underwriting conservatively (below HUD max, excluding utility stipends).

      In Birmingham specifically, which ZIP codes and property types are you seeing perform best for HCV today, and does Evernest currently manage S8 units in those submarkets with fast lease-up and stable inspections?

      If aligned, I’d be interested in moving forward on deals in this market.

      Best,
      Juan Carlos

      0Reply
  • Arman AhmedPro Member
    Real Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 961 votes
    9mo

    @Juan Carlos Flores Garcia

    Great questions, Juan — you’re clearly doing the right diligence. For investors weighing Section 8-heavy strategies, one thing to consider is comparing Birmingham against Midwest markets, where Section 8 demand is also very strong but acquisition prices can be lower and tenant placement is often faster. In many Midwestern metros, investors see less saturation, more consistent rent standards, and smoother coordination with housing authorities when paired with experienced local managers. Regardless of market, the biggest differentiator tends to be ZIP-level selection and property management quality, not just city-wide stats.

    [email protected]614-418-6081
    0Reply
  • Juan Carlos Flores Garcia
    OP
    Member since 2021 · 33 posts · 11 votes
    9mo

    Hi Arman, thank you for the insight — I completely agree that ZIP-level selection and strong local property management are the real drivers in Section 8 performance.

    From an investment standpoint, my priority is markets with consistent HCV demand, fast tenant placement, and stable voucher rent standards, especially in working-class ZIP codes where units lease quickly and turnover is manageable.

    Based on your experience, which specific Midwest or Southeast markets (and ZIP codes) would you recommend where:

    • Section 8 demand is deep and reliable
    • Lease-up timelines are typically short
    • Acquisition prices still support strong cash flow
    • And there are experienced, Section 8-focused property managers with a solid track record

    I’d appreciate any guidance on markets you’ve seen perform well recently, as well as management teams you trust in those areas.

    Best regards,
    Juan Carlos

    0Reply
  • Bo SmithPro Member
    Hinton, WV · Member since 2026 · 1k+ posts · 373 votes
    8mo

    Birmingham's solid for Section 8 but here's what most out-of-state guys miss: the voucher waiting list timing varies by zip code. Some areas have 6-month waits, others 2+ years. I always call the housing authority before buying to check current wait times in that specific area. Have you looked into which neighborhoods have the shortest voucher queues?

    1Reply
  • Matthew HeckmanPro Member
    Investor · Member since 2024 · 33 posts · 20 votes
    5d

    Hey Juan, I'm a new investor, I'm looking in the Birmingham area as well with a similar strategy in mind. How has your experience been so far? I'm happy to connect and share resources and knowledge.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free