Rentals around Birmingham AL

[Rebekah D Arnold]

Hi, I recently moved to the area after flipping our primary residence outside of ATL. While I am originally from North Alabama I don’t have any connections in the Bham area that are involved in real estate except for the agent we used to buy the house. We the capital we earned from the last house we want to start investing in buy and holds. Because of other connections we considered Homewood/Vestavia but the price of homes and taxes would prevent us from acquiring multiple homes in the beginning. I would like some input on the Hoover and Gardendale areas, or any other that seems profitable. Any thoughts would help, Thanks.

[J Benoit]

These are definitely two different markets.  There are rental properties in both.  Birmingham is blessed with A, B and C markets.  Many parts of the country don't have C properties that are affordable.  Our rates of return are what make it attractive to out of state owners.  Where you buy will depend on what level of risk and rate of return you are willing to take.  

When finding a real estate agent, I would be careful not to take the first sign you come across.  The rental market is very different than the retail market.  Not all Realtors are created the same.  This is a niche and you really need to buy right or the game will be over before you start.

Hoover and Gardendale are good areas but considered an A market.  You will have your highest investment costs here but you will also have your lowest risks here.  Your returns will also be significantly lower.  On the upside, I think you also have a nice opportunity for appreciation.  I also strongly suggest to my clients not to buy on appreciation/speculation as that is only a guess.  When you buy for cash flow you know what to expect.