Is Birmingham Still a Smart Market for Rental Investors?
Is Birmingham Still a Smart Market for Rental Investors?
By Matthew Whitaker, founder of Evernest.
Quick disclaimer: this is general market commentary, not financial or investment advice. Real estate data changes over time and varies by neighborhood, so confirm current numbers with a local agent before making an investment decision.
If you're weighing Birmingham as a rental market, I wanted to bring in someone closer to the ground than I am. Hunter Taren, our head of sales, works out of our corporate headquarters in Birmingham, has lived there for over 5 years, and invests in the market himself. In the video below, he walks through the real numbers and what he's actually seeing on the ground, so you can decide if this is the right market for you. Here's a breakdown of what he covers.
The short version
The short version: Birmingham remains a solid rental market, but it's really two markets in one. Jefferson County, closer to downtown, offers lower home prices and better cash flow potential. The Hoover and Shelby County side of the metro runs higher on both price and appreciation. Vacancy sits around 7% to 8% across our own portfolio, homes typically rent within 50 to 60 days, and demand is backed by strong employers and steady population growth. The market isn't uniform, so where you buy matters as much as whether you buy.
Birmingham by the numbers: rent and home prices
We're going to look at two areas here: Jefferson County specifically, which covers Birmingham's downtown and the immediate neighborhoods around it, and the greater Birmingham-Hoover Metropolitan Statistical Area, which includes Shelby County and other neighborhoods to the south that can meaningfully shift the numbers.
Starting with rent, the Birmingham-Hoover metro typically sees median rent somewhere between $1,100 and $1,300. The Hoover side of that range generally accounts for the higher end, while properties closer to downtown Birmingham and the surrounding neighborhoods tend to fall toward the lower end. Over the last 3 to 5 years, we've seen a modest increase in median rent prices. In the last year or two, though, that's flattened out, similar to many markets around the country, and in some neighborhoods rents have even dipped slightly.
Hunter owns a property himself in the East Lake neighborhood, close to downtown. When he first bought it, it rented for around $700 to $800. He was able to raise that as high as $1,150, but softness in the market over the last year or so forced a slight reduction to about $1,000. It's moved up and down somewhere in the middle recently, but the longer trend has been reasonably modest growth.
On home prices, the median in Jefferson County alone runs around $240,000 to $245,000 as of recent estimates. Across the full Birmingham-Hoover metro area, that jumps to nearly $300,000, right around $299,900. South of Birmingham, in the Hoover and Shelby County area, home prices run considerably higher, while Jefferson County pulls the overall median down.
Put those two numbers together and a pattern emerges: if you're looking for cash flow, look toward Birmingham and the neighborhoods in Jefferson County. If you're looking for appreciation, look toward Hoover or areas south of the city.
Is there actual demand? Vacancy and days on market
Numbers on a spreadsheet are one thing. Actual demand is another, so here's what we're seeing in our own portfolio. Evernest manages close to 900 homes across the Birmingham metropolitan area. Vacancy across that portfolio sits around 7% to 8%, meaning we're running 92% to 93% occupied. That's a strong number.
Days on market tells a similar story. Within our own portfolio, the median is 51 days. Looking across all reported sources for the broader market, that number runs closer to 58 days. Either way, that's less than 60 days, typically somewhere between 50 and 60 days, to rent a home in Birmingham.
What's driving that demand
Birmingham has several strong employers anchoring that demand. UAB, the University of Alabama at Birmingham, is the city's largest employer, with 28,000 people on staff. The hospital sits downtown, and people commute from 30, 45 minutes away or more to work there. Regions, the bank, is headquartered in Birmingham as well. Blue Cross Blue Shield of Alabama employs over 3,300 people, and Amazon's fulfillment center out in Bessemer adds another 5,000 jobs to the area.
On top of that employer base, the metro population is up 2.2% since 2020. A steadily growing population, a strong economy, and solid employers add up to consistent demand for rental housing.
Cash flow vs. appreciation: pick your submarket
Birmingham isn't one market, it's really two, and knowing which one you're buying into matters more than any single number on a spreadsheet.
For cash flow, Eastlake is a neighborhood worth a look. It's seen steady appreciation, and the city has invested in the surrounding infrastructure, new parking, bike lanes, and venues, that's made it a more desirable place to live. Both home prices and rents have moved up, but entry points under $200,000 are still findable, with a reasonable price-to-rent ratio.
A more speculative play near downtown is North Birmingham, within roughly a mile of the city center. There's meaningful new development underway, including a new amphitheater now hosting events and concerts. It's an area where prices may still reflect a discount before development catches up to it, though that window won't stay open indefinitely.
For appreciation, Hoover and the broader Shelby County side of the metro are where to look. Hoover itself has strong condo and townhome developments, with certain pockets appreciating quickly. For something further out and away from the hype, areas like Alabaster and Pelham offer more land and home for a lower price, with solid, high-demand fundamentals that should continue to appreciate.
For a full breakdown of specific neighborhoods and property classes across the city, our dedicated Birmingham investment guides on the blog go deeper than we can cover here.
Where to be careful
Not every part of Birmingham is a slam dunk, and that's true of any city. One area worth extra caution is the west side of Birmingham, directly west of downtown. It's one of the oldest parts of the city, with older housing stock and higher crime in parts of the area. You can find a good price there, but the property may need significant work. Consult an investor-friendly local agent and review crime data before committing.
We also hear from investors interested in properties well outside the Birmingham metro, near the lakes or out toward the Georgia line. Some of those areas can offer solid deals, but remember where the demand is actually coming from. The further you get from the jobs and the metro core, the harder it can be to find a reliable tenant, and the more that inconsistency in demand becomes the real risk.
Quick recap
- Median rent in the Birmingham-Hoover metro runs $1,100 to $1,300, with Hoover at the higher end and downtown Birmingham at the lower end.
- Home prices differ sharply by area: around $240,000 to $245,000 in Jefferson County versus nearly $300,000 across the full metro.
- Demand is strong: vacancy around 7% to 8% and homes typically renting within 50 to 60 days.
- Major employers anchor that demand, including UAB, Regions, Blue Cross Blue Shield of Alabama, and Amazon.
- Choose your submarket based on your goal: Jefferson County and Eastlake for cash flow, Hoover and Shelby County for appreciation.
- Be cautious with the west side of Birmingham and areas far outside the metro core, where demand is less consistent.
Frequently asked questions
Is Birmingham, Alabama still a good market for rental property investors?Yes, based on current demand indicators: vacancy around 7% to 8% and homes typically renting within 50 to 60 days across a portfolio of nearly 900 managed homes. Rent growth has flattened in the last year or two, similar to many markets nationally, but the underlying demand from employers and population growth remains strong.
What's the median rent in the Birmingham-Hoover metro area?Median rent typically falls between $1,100 and $1,300. Properties in Hoover tend toward the higher end of that range, while properties closer to downtown Birmingham and the surrounding Jefferson County neighborhoods tend toward the lower end.
How long does it typically take to rent a home in Birmingham?Somewhere between 50 and 60 days in most cases. Within Evernest's own portfolio, the median is 51 days, while broader market data across reported sources runs closer to 58 days.
What's driving rental demand in Birmingham?Several large employers anchor the area, including UAB (28,000 employees), Regions Bank's headquarters, Blue Cross Blue Shield of Alabama (over 3,300 employees), and Amazon's Bessemer fulfillment center (about 5,000 jobs). The metro population has also grown 2.2% since 2020, adding to steady rental demand.
Should I invest in Birmingham for cash flow or appreciation?It depends on which submarket you target. Jefferson County and neighborhoods closer to downtown, like Eastlake, tend to favor cash flow with lower entry prices. Hoover and the broader Shelby County side of the metro tend to favor appreciation, with higher home prices but stronger price growth in certain pockets.
Are rents still rising in Birmingham, or have they leveled off?Rents rose modestly over the last 3 to 5 years but have largely flattened in the last year or two, consistent with trends in many markets nationally. Some neighborhoods have even seen slight rent decreases recently, so current comps matter more than longer-term trend lines.
What areas of Birmingham should investors be cautious about?The west side of Birmingham, directly west of downtown, has older housing stock and higher crime in parts of the area, so properties there may need significant work despite lower prices. Properties well outside the Birmingham metro, far from the major employers driving demand, also carry more risk of inconsistent tenant demand.
Where to go from here
If you're serious about investing in Birmingham and don't already have an investor-friendly real estate agent, connect with one of our in-house agents to start looking at properties.
Connect with an Investor-Friendly Agent
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