Looking for the best places to invest in Birmingham, Alabama? The Magic City is known for its food, culture, and its designation as the entertainment hub of Alabama. With its museums, parks, and rich history; Birmingham is a great place to look for your first, or next, investment property. Named after Birmingham, UK, for its industrial beginnings, it’s the only place in the US that has all of the ingredients to make iron - coal, iron ore, and limestone - in one centralized location. The city's history is tied closely to its industrial roots and can still be felt today, with many historic homes dotting the area. Considering more than half of the population rent their homes, and the average property price is significantly lower than the rest of the country (on average about $170k), the city of Birmingham is an excellent choice for any new investor looking to get their foot in the door. Even though the entire city is practically an investors paradise, there are a few neighborhoods that should be at the very top of your wish list. In this article, we’ll cover some of the best places to invest in Birmingham and the types of properties, neighborhoods, and price ranges you can expect there.
Highland Park
First up on our list is Highland Park.
Where is it located?
This locale sits on the western side of the city, roughly nine minutes away from the city center. Its convenient location makes it an ideal fit for those who may work downtown but are okay with a short commute. With plenty of bars, restaurants, and coffee shops, Highland Park is an excellent area for residents who like their circle nearby while still retaining access to the city. It is also regarded as one of the most developed suburbs in Birmingham and most residents here rent their homes, so it’s a great area to explore an investment property.
What types of properties are available?
Highland Park is almost entirely composed of B-Class, single-family homes, with a few newly developed apartment buildings mixed in. Most of the properties are historic-style homes, some of which have been recently renovated and others that are perfect for an investor in search of a fixer-upper. Many of the homes here are priced below average for the city of Birmingham, making it a great place to start your search.
What other benefits are there?
This neighborhood is in close proximity to many of Birmingham's parks, as well as the expansive Highland Park golf course. It’s also a short drive away from the University of Alabama Birmingham, which means that this area will always be in high demand for renters attending the university.
Crestwood South
Where is it located?
Located further outside of the city center, approximately 15 minutes away from downtown, is the Crestwood South neighborhood. Given its distance from central Birmingham, the lot and home sizes tend to be bigger and more on par with traditional suburban areas. With all the extra space that the outer edge of the city provides, this is a great place for young professionals and people with families looking for larger properties.
What types of properties are available?
Most of the properties in Crestwood South are A-Class, single-family homes. Many of the residents in this neighborhood own their homes, making it the ideal location for an investor looking to renovate and resell. However, given that it is considered one of the best neighborhoods to buy in, renters are still aplenty. So, if you’re looking for a long-term investment property, we would suggest keeping Crestwood South on your radar. Note that the properties in this area are priced higher-than-average for Birmingham, however, the quality of homes and lot sizes make Crestwood South a highly desirable area for residents.
What other benefits are there?
As it falls near the outskirts of Birmingham, Crestwood South is closer to the green spaces that surround the city. With only an 11-minute drive to Mount Ruffner and a 20-minute drive to Lake Purdy, residents of Crestwood South have great access to not only the entertainment of the city center, but also the great outdoors.
Forest Park
Where is it located?
Not far from Crestwood South is Forest Park, one of the most affluent areas in Birmingham. Located just 10 minutes outside of the city center, Forest Park offers access to many shops, bars, and restaurants while still maintaining the larger property sizes of a more suburban area. There are plenty of young professionals that choose to live in Forest Park due to all of its convenient amenities as well as its proximity to the city. And while the area is quite nice, most residents rent their homes, making it an ideal place for investors looking to buy in a great neighborhood.
What types of properties are available?
Forest Park is mostly A-class, single-family homes with a few small apartment buildings mixed in. Many of the properties are well-maintained, single-family, historic homes which make it great for an investor looking to rent out a property without having to put a ton of work in to get it rent-ready. Prices of properties are, on average, slightly higher than the city overall. However there is still a healthy range of different price points, so if you are able to find a property within your budget, you can almost guarantee a home in this neighborhood will hold its value well.
What other benefits are there?
One of the greatest perks of living in Forest Park is its proximity to everything Birmingham has to offer. There’s great access to parks for residents ready to get outside, as well as plenty of shops, and dining. Residents of Forest Park enjoy all the benefits of remaining close to the conveniences of the city along with the added bonus of larger homes and lot sizes.
Homewood
Where is it located?
Just six miles outside of the city of Birmingham is Homewood Alabama. This affluent suburb is south of the city center and home to many families and young professionals. Since it is located outside of the city center it offers all the benefits of the suburbs, with crime rates that are lower-than-typical, and some of the best schools in the area. Essentially, properties in Homewood are sure to hold their value.
What types of properties are available?
Homewood is entirely made up of A-Class, single-family homes, many with large lots and spacious yards, which are perfect for residents with families or those looking for a little more space. There is a wide range of property prices across the city of Homewood, so there’s room for any investor to find the perfect fit for their needs. Similar to Forest Park, the high-end properties keep the neighborhood value up, protecting your investment.
What other benefits are there?
The greatest benefit of living in Homewood is the school district. Jefferson County schools, and specifically the schools in Homewood, are regarded as some of the best the Birmingham area has to offer, and are a huge selling point for families looking to relocate. Like other areas in the city, Homewood is notable for its access to parks and greenspaces, as well as large shopping centers such as The Summit.
East Pinson Valley
Where is it located?
The final neighborhood on our list is East Pinson Valley, located 20 minutes north east of Birmingham’s city center. This neighborhood is one of the best areas for new investors. That’s because the low property prices make it an easy area to buy into, signaling a great fit whether your plan is to flip or rent. The area is quite rural, great for residents who are looking to get out of the city, while still maintaining better-than-average schools for the area, making it a good fit for families.
What types of properties are available?
The properties here are primarily C-class, meaning great ROI if you’re willing to put in the work. Given that the area is rural, the home sizes are bigger than average while still maintaining a low price point. This means that they also make for excellent fixer properties. Many of the homes are well over 2,000 square feet and come with plenty of land, if you’re looking to build a mother-in-law suite, or accessory dwelling unit (ADU), for additional income.
What other benefits are there?
East Pinson Valley is one of the most diverse areas in Birmingham, and is also one of the closest neighborhoods to Birmingham-Shuttlesworth International Airport. Like most areas on the outskirts of the city, EPV has access to many parks and green spaces, such as Cosby Lake and Jefferson State Community Park. While the biggest driving factor for residents is definitely the rural feel, you’re never too far from the conveniences of the city.
Final Thoughts: Best Places to Invest in Birmingham
Birmingham and the surrounding areas all have their own niches and specialties to offer investors and residents alike. Within these neighborhoods, investors can find everything from A-class homes in affluent neighborhoods to B-class properties with great promise for ROI. Whether you’re new to investment real estate, or just new to Birmingham, there’s plenty of properties to fit the needs of investors of all kinds. While there’s a lot to take into consideration when it comes to where to invest, we hope this has helped you gain a little clarity on where you’d like to begin your search. To get the best feel for where you’d like to invest, though, it always helps to talk to an expert who has boots-on-the-ground knowledge and knows each neighborhood like the back of their hand. Our Birmingham team is always happy to help and more than willing to answer any questions you might have. If you’d like to learn more about the Birmingham market as a whole, including population insight, renal market trends, and more, download our Birmingham Market Deep Dive.
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