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Guide to Investing in Huntsville, Alabama

Guide to Investing in Huntsville, Alabama

Real estate has become a popular investment for people to diversify their income streams and potentially hedge against inflation. If you want to start real estate investing, Huntsville, Alabama, is certainly worth considering.

Huntsville sits in north Alabama, just 25 miles from the Alabama-Tennessee border. Known as the Rocket City, Huntsville is home to the US Space and Rocket Center. It’s also where Alabama joined the Union in 1819 and is home to art and history museums.

Huntsville, Alabama

If you’re looking at Huntsville for your real estate investment, here are some things to consider:

Population

Huntsville, Alabama’s population has grown slowly but steadily for several decades. The July 2021 Census found that it’s now Alabama’s largest city by population — edging out Birmingham. It currently has 216,693 residents, its largest population ever.

The Huntsville metro area spans Madison County, Limestone County, and Morgan County.  It had 491,000 people as of 2020, per Census Reporter. The UN projects Huntsville to grow steadily through 2035.

Huntsville’s median age is 36.8 years old. That is lower than both Alabama’s and the US’s median ages. Median per capita and household incomes are higher in the city ($36,762 per capita, $56,728 per household) and metro area ($36,211 per capita, $66,450 per household) than in the rest of the state, per Census Reporter. 

A growing city with high earnings, like Huntsville, could signal excellent real estate opportunities here.

Job Market

Huntsville has a fantastic job market. According to the Bureau of Labor Statistics, Huntsville had a 1.6% unemployment rate as of April 2022. That is lower than April 2022’s 3.6% national average and Alabama’s 2.8%. People relocating for job offers could provide some ideal opportunities for real estate investors.

Huntsville has a mix of blue-collar and white-collar workers. Its largest industries are government, professional, and business services. It has a large engineering and defense worker population because NASA and the US Army’s Redstone Arsenal both have large presences in the area.

Overall, Huntsville has a booming job market, which creates solid opportunities for real estate investors.

Neighborhoods

Huntsville is made up of 65 neighborhoods, each offering a diverse set of living experiences, amenities, and attractions to residents and investors alike. Investors will find different kinds of tenants based on the neighborhood where they choose to invest.

Consider the following neighborhoods when looking for the best places to invest in Huntsville, Alabama.

  • Madison: Located about 12 miles southwest of Huntsville proper, this town of about 50,000 is one of the best places to live in Alabama. It offers a sparse urban feel, with a mix of small, independent businesses and larger chains. Most residents own their homes, which tend to be more expensive, and the median income is almost $100,000. Madison has some of Alabama’s best schools which also rank well nationally.
  • Athens: Athens sits about 35 miles northwest of Huntsville proper, near the Tennessee River. This quiet town has a lot of green space, thanks to its many parks, which helps it rank among the top places to retire in Alabama. Most residents own their homes, however Athens State University and Athens Limestone Hospital draw renters and provide employment in the area. 
  • Harvest: Located 15 miles from Huntsville proper, this tiny 5,700-person town offers its residents a quiet, rural lifestyle. However, it’s not far from the shopping and entertainment Huntsville and Madison offer. Median incomes are high, and the vast majority of residents own their homes.
  • Hazel Green: Hazel Green is a tiny town of just under 4,000 people located 16 miles north of Huntsville proper — and about the same distance from the Tennessee border. It’s a tight-knit community with a peaceful, quiet feel, and most residents own their homes. However, development in the area has picked up recently. New housing options and retail spaces are starting to appear in this community.

Home Values

Home values are vital to consider when investing in rental real estate. After all, a steady increase in home values could help you maximize your return on your investment.

According to NeighborhoodScout, Huntsville’s median home price is $283,762, and the city has seen an average annual appreciation rate of 4.77%. Redfin gives the Huntsville market a 72/100 on its Redfin Compete Score, putting it in the Very Competitive category. 

Most homes are single-family detached houses, however there are also many high-rise apartments, duplexes, and other apartment buildings to consider. About 43% of Huntsville proper’s residents rent their homes. That shrinks to 31% for the metro area, according to Census Reporter. Average rent is $1,105 based on data from RentCafe.

Exact stats vary by neighborhood. Always do the math to make sure you can earn a profit based on home values and median rent.

Quality of Life

Investors should consider the quality of life in the area they invest. This can attract more tenants, creating long-term value in your investment.

US News analyzed 150 metro areas in 2022, ranking Huntsville the best place to live and the 16th-fastest-growing area in the US. This metro area is inexpensive compared to others — due to low housing costs — but is growing and offering more to residents. 

For example, there’s the U.S. Space & Rocket Center. This museum details the city’s involvement in the Space Race. The city has many other museums unrelated to aerospace as well, like the North Alabama Railroad Museum.

Construction has exploded in the downtown area. The city is adding new restaurants, shopping, and apartments. These pose real estate investment opportunities.

Being in Alabama, the weather is hot and humid from around April to October. Snow isn’t a common occurrence, making outdoor events common.

However, north Alabama can be prone to tornadoes. This is important to keep in mind for investors considering Huntsville real estate.

Crime and Safety

Crime and safety are important considerations when choosing neighborhoods to invest in. Class A and B neighborhoods tend to have lower crime and higher-earning individuals, but properties are more expensive. Class C and D neighborhoods may have more affordable properties, but crime could be higher. 

US News gave Huntsville an 8.7/10 on its Crime Index. It has lower rates of violent and property crime than the national average. 

Crime varies by neighborhood in Huntsville, so investors should consult a neighborhood crime map. Communities closer to the center of Huntsville have some of the highest crime rates in the area. These include Fanning Manor, Terry Heights, and University Park. Some neighborhoods west and south of the city, like Sherwood Park, Villas at Moore Farm, Huntsville Park, and Merrimack District, also reported higher crime rates.

Regardless of neighborhood, investing in security systems can be a good idea. Security cameras, callboxes, home security systems, and similar measures can make residents feel safer and help investors increase property values and rents.

Top Schools

Huntsville has 21 public elementary, middle, and high schools, plus 44 private schools. US News put 15 Huntsville high schools on its list of Best High Schools. These schools are a significant advantage for investors looking to attract families.

Meanwhile, college students may also be a solid rental pool. Huntsville is home to Alabama A&M University, the University of Alabama-Huntsville, and Oakwood University. As mentioned earlier, nearby Athens has Athens State University as well. 

Huntsville is considered one of the most educated cities in Alabama, thanks to the presence of these institutions.

Final Thoughts

The Huntsville real estate market offers low housing prices. However,  the city’s employment opportunities attract more professionals earning healthy incomes. This is helping to grow the housing market in the area. Whether you’re an experienced real estate investor or brand new to the industry, Huntsville, Alabama could be a great place to build your real estate portfolio

Get Started Buying Homes With Evernest

Whether you’re purchasing one Huntsville home or one hundred, you don’t have to go it alone. 

If you’re ready to buy your first (or next) investment property, here are 3 steps to get started today:


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