Birmingham, Alabama is not only Evernest’s home, it’s also one of our favorite US markets for rental property investors. It has a wide array of neighborhoods and suburbs, such as:
Every Birmingham community has unique characteristics and offers different potential returns for investors and landlords. Some neighborhoods are better for single family homes and others for STRs. Set your business up for success by purchasing a property in the right part of the Birmingham real estate market.
In this article, we’ll provide a brief overview of several top Birmingham neighborhoods and examine multiple data points for each, including:
Once you’ve completed this article, if you’re still looking for advice about where to invest in rental properties in Birmingham, check out the video of this podcast episode in which we’ll take you on a tour of Class A, Class B, Class C, and Class D neighborhoods. For prospective investors we also have a white paper with even more in depth analysis of Birmingham investment neighborhoods.
Just southeast of Helena is the Birmingham suburb of Alabaster. Being fairly rural, most Alabaster residents own their homes. Alabaster is pretty family-friendly, thanks to its highly-rated schools and numerous parks. We are seeing more institutional investors purchasing in this area, as well as international investors looking for newer properties south of Birmingham. Investors should be aware that properties are more experienced, but will experience more price appreciation as well as rent appreciation over time. Additionally, budget for more expensive taxes in this area.
Median Sale Price: $255,000
Change in Sale Price (year over year): 4%
Days on Market: 50 days
Median rent: $1,171
Renter Occupied Households: 13.99%
Median Household Income: $83,181
Arlington and West End are close to the city center, making this neighborhood a mix of urban and suburban. Most residents rent here. This area is one of the lower-income neighborhoods in Birmingham. We’ve seen investors purchase houses wholesale for $2,000 to $20,000 in this area, offering a higher potential return on investment for landlords than other areas in Birmingham.
Median Sale Price: $49,000
Change in Sale Price (year over year): 4.7%
Days on Market: 47 days
Median rent: $693
Renter Occupied Households: 65%
Median Household Income: $33,787
Centerpoint sits about 20 minutes north of Birmingham, not far from Huffman. This sparse suburban neighborhood has a lot of brick rancher houses, which, in our opinion, are built for efficiency. Many have three beds and either two or one and a half baths, are carpeted, and have carports. Not many frills beyond those. Still, these are some of the Birmingham area’s most popular rental homes, with rents generally ranging from $800 to $1,100. This area has plenty of restaurants and shopping on Center Point Parkway, and Jefferson Community College is at the west edge of the community.
Median Sale Price: $125,000
Change in Sale Price (year over year): 3.4%
Days on Market: 91 days
Median rent: $932
Renter Occupied Households: 43.57%
Median Household Income: $44,676
Chalkville is right next to Centerpoint to the east. It’s a nice area because houses start to get further and further apart from each other. Since it’s more northeast, homes are newer, but the community is a bit more sparse.That said, it offers a good public school system, making it attractive to families. Centerpoint and Chalkville can be challenging locations for investment buyers to break into the market, so be sure to have an investor-friendly realtor who is intimately familiar with the area.
Median Sale Price: $179,000
Change in Sale Price (year over year): -18%
Days on Market: 25 days
Renter Occupied Households: 13.84%
Median Household Income: $71,303
East Lake is a well-situated northeast Birmingham neighborhood. It’s blocks away from restaurants, shopping, and Shuttlesworth Airport. We find that this neighborhood is one of the most popular areas for out-of-state investors looking to buy affordable properties in a rental dominated area. This is a high Section 8 rental area and we strongly recommend doing your homework before and only investing based on your risk tolerance and goals. Here more from us about the East Lake neighborhood in this video clip describing investment potential in the area or listen to this complete podcast episode focused exclusively on East Lake as one of the best places to invest in Birmingham.
Median Sale Price: $96,400
Change in Sale Price (year over year): -15.9%
Days on Market: 56 days
Median rent: $845
Renter Occupied Households: 51%
Median Household Income: $31,740
10 minutes southwest of Birmingham’s city center sits the community of Fairfield. This dense Birmingham suburb is near several restaurants and outdoor amenities, like Red Mountain Park. Birmingham is a quick drive via I-20/I-59.
Median Sale Price: $87,800
Change in Sale Price (year over year): 28.7%
Days on Market: 62 days
Median rent: $871
Renter Occupied Households: 46.81%
Median Household Income: $43,914
Helena sits about 25 minutes south of the city via I-65. The vast majority of residents own their homes in this upscale, rural neighborhood. It is one of Niche.com’s top 10 places to live and raise a family in Alabama, thanks to good schools and low crime rates. The majority of homes in this area are newer, built primarily in the ‘90s and 2000s. Most of these homes have at least three bedrooms, two bathrooms, a garage, and finished basements, making them appealing rental units. In this area, tenants typically stay for two to four years, reducing cost of turnover.
Median Sale Price: $313,100
Change in Sale Price (year over year): -4.2%
Days on Market: 57 days
Median rent: $1,101
Renter Occupied Households: 9.3%
Median Household Income: $96,173
About 20 minutes southwest of Birmingham lies rural Hueytown and Pleasant Grove. Most residents own, but there is a fairly large renter population for a rural area. This area is noteworthy for real estate investors because it has primarily newer homes, meaning lower maintenance costs and more efficient homes. This area also garners higher rents than other parts of Birmingham, making a positive cash flow scenario more likely.
Median Sale Price: $159,500
Change in Sale Price (year over year): 8.4%
Days on Market: 76 days
Median rent: $1,072
Renter Occupied Households: 27.06%
Median Household Income: $69,499
Huffman is a small but dense suburban neighborhood 15 minutes northeast of Birmingham on Center Point Parkway. The housing stock does get newer as you move up the parkway towards Huffman and many residents rent in this area, making it another appealing place for real estate investors. The Birmingham Shuttlesworth International Airport is a few minutes southwest, between Huffman and Birmingham proper. There are many solid C+, B, and B- houses with three bedrooms and one bath. Tune in to this complete podcast episode to learn more about this area.
Median Sale Price: $181,300
Change in Sale Price (year over year): 7%
Days on Market: 72 days
Median rent: $842
Renter Occupied Households: 32.09%
Median Household Income: $58,246
Pelham is one of Birmingham’s more affluent neighborhoods, being adjacent to Helena and Alabaster. Residents enjoy a mixed rural and suburban feel, thanks to the numerous amenities in town and the nearby Oak Mountain State Park. This area has both families and young professionals, and is Niche.com’s 8th best place to live in Alabama. Most own their homes, but a decent number of residents rent. Similarly to Helena and Alabaster, homes in Pelham are typically newer builds with more bedrooms and modern amenities for renters. These properties are likely to cost owners less in terms of maintenance and CapEx.
Median Sale Price: $303,500
Change in Sale Price (year over year): -12.2%
Days on Market: 43 days
Median rent: $1,194
Renter Occupied Households: 16.03%
Median Household Income: $81,606
Did any of these Birmingham neighborhoods get your attention? Each offers some great benefits, but some may fit what you’re looking for better than others. Investors must weigh the features of each against their resources, goals, and preferences.
Evernest can help you in this process.
If you’re ready to buy your first (or next) investment property in Birmingham, click here to learn about working with our investor friendly agents in Birmingham to access off-market deals and more.
Taylor Streitmatter is Evernest’s Director of Brokerage. His diverse expertise includes sales, operations, and brokerage management.
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