Once you’ve decided to invest in real estate, deciding where to invest is critical. As a real estate investor, you want to choose a stable, high-yield market, one that is affordable with a low unemployment rate and a low cost of living. With so many potential places to invest, don’t overlook Birmingham, Alabama. The Magic City is in the midst of a transformation, one that has caught the eye of the New York Times and of National Geographic, highlighting it as one of America’s up-and-coming cities. Once considered ground zero for the Civil Rights movement, Birmingham is now a culinary hotspot, replete with locally brewed craft beers and a thriving theater district. With a low cost of living and a stable, affordable real estate market, you definitely want to give Birmingham serious consideration. In fact, here are five reasons to invest in the Birmingham real estate market.
Birmingham provides the ideal atmosphere for real estate investing
Why not invest in the town CNN Money calls one of the “Ten Hottest Housing Markets” in the country? Birmingham provides a stable real estate market that doesn’t have the sort of wild appreciation/depreciation swings that plague bigger markets like New York and California. Real estate investors know the unemployment rate and job creation rate are important factors to consider when seeking a location. Good news for those seeking to invest in Birmingham, which has an unemployment rate of 4.6%, placing it 14th out of 49 large metropolitan areas. Birmingham also ranks 19th out of 50 in job creation and boasts a GDP growth of 3.8%, outpacing the national average of 2.5%, placing the Magic City in the top 15% of metropolitan areas.
Network World called Birmingham the “Silicon Valley of the Southeast,” and Forbes ranked the city 6th on its list of “New Industrial Boomtowns.” With the recent addition of hundreds of tech jobs and a 20% hike in federal research funds for biomedical projects based in Birmingham, the city is poised to hire even more workers in 2015. The forecast looks bright for Birmingham making it attractive for potential real estate investors.
Birmingham is an affordable market for those looking to invest in real estate properties
While home prices here are inching upwards, Birmingham homes are still more affordable than most large US markets. It isn’t just home prices that are affordable. Birmingham’s composite cost of living is 88.5% that of the national average with housing costs coming in at 74% of the national average. Forbes even listed Birmingham as first on its list of “America’s Most Affordable Cities.” If you’re looking for a place to invest where taxes won’t consume most of your profit, look no further; Kiplinger ranked Alabama 5th on its list of the “Most Tax Friendly States.” In fact, Alabama’s property taxes are among the lowest in the nation, a rate of 3.33 compared to a national average of 10.35. That could be the difference in paying $400 vs. $2,000.
Birmingham is attracting millennials, and that’s a good thing for those looking to invest in real estate
According to U. S. News and World Report, “real estate investors should look to cities with an upsurge in millennials when looking for new investing opportunities.” Enter Birmingham, which was recently ranked second in the nation for attracting millennial homebuyers. Birmingham’s affordability, diverse job market, and low cost of living make it a draw for millennials. In fact, mainstreet.com recently listed Birmingham as one of the top ten cities for job-seeking grads. Millennials are also flocking to Birmingham, enticed by the current transformation of downtown.
Birmingham is a city of renters, looking for quality homes in good neighborhoods
Birmingham/Hoover recently made RealtyTrac’s list of “Top 25 Hidden Gem Single Family Rental Markets,” which was based on gross rental yield, expected return on investment, and maintenance fees and other costs. The report authors “identified the top overlooked markets where single family rentals still make good financial sense but where there is little to no competition from the big players.” Birmingham also offers a city where 50% of its population rents and is a market with a 4.9 vacancy rate for multifamily rental properties.
With three large universities, including UAB Medical School, Birmingham delivers a large population of potential renters. Medical and dental residents are often married, some with children, and are often seeking affordable rental homes in good neighborhoods while they spend several years in Birmingham completing their residencies. With a large nursing, dental, and medical school, UAB alone provides a community of hundreds of individuals seeking quality rental homes.
Birmingham is hot, and, no, we don’t just mean the weather
The nation has its eyes on Birmingham and is impressed with what it’s seeing. Forbes listed Birmingham as one of 15 U. S. Cities’ Emerging Downtowns, and in a recent article for National Geographic Traveler, author Bruce Schoenfeld had this to say about the Magic City: “I’ve found a modern city that has retained its pace and charm, one with many of the accoutrements and attitudes of the New South but without the shiny facelessness common to too many cities around the region.”
Birmingham has undergone an unprecedented renaissance that has transformed the city. Birmingham now boasts a culinary scene that rivals anywhere and includes two James Beard honored chefs, cooking’s highest honor. With the beautiful Alabama Theater and the recently renovated Lyric, the city is now home to a thriving theater district. The list continues with the renovation of Railroad Park, the addition of Regions Field, home of the Barons, and a new hotel and restaurant district downtown. Birmingham also boasts Jones Valley Teaching Farm, a unique, downtown community garden and the only LEED-certified library in the state. Birmingham is a vibrant, up-and-coming city with Southern charm, making it not only a great place to live but also a great place to invest.