Buy-and-hold real estate investors looking for rental property with the potential for steady returns may find Birmingham an attractive proposition. Over the past 5 years, home values have increased by 75%, while median rents for 3-bedroom homes have grown by about 41%, according to Zillow and Zumper (Dec 2021/Jan 2022).
In Birmingham neighborhoods like Southside and Fountain Heights, about 80% of the households are occupied by renters. Birmingham was founded right after the Civil War, with an economy driven mainly by mining and manufacturing. Today, Birmingham has transformed itself into a hub for medical research, services, and banking, while still retaining its manufacturing roots.
We recently looked at Birmingham neighborhoods in which to find great investment properties.
Key takeaways
- Birmingham is ranked as one of the top 25 housing markets for 2022 by Realtor.com.
- In popular neighborhoods like Highland Park and Forest Park, more than 50% of the households are occupied by renters.
- Neighborhoods attractive to socially active professionals, like Central City and Southside, have renter-occupied household rates of 79% or more.
>>Explore Roofstock's Birmingham investment properties.
Why invest in Birmingham?
The real estate market in Birmingham offers all of the things that rental property investors are looking for. Home prices still are relatively affordable, rent prices are on the rise, and, in neighborhoods like Highland Park and Central City, there are far more renters than there are homeowners.
Birmingham also is ranked by Realtor.com as one of the top 25 housing markets for 2022, with an estimated combined sales and price growth of nearly 14%. Even though home prices and rents are increasing in many neighborhoods in the city, Birmingham still has a relatively affordable cost of living below the national average.
15 great areas in Birmingham for investment properties
Here are 15 of the best neighborhoods in Birmingham, according to research from Niche.com, Redfin, and Realtor.com as of December 2021.
Highland Park
The Highland Park neighborhood is located just east of the University of Alabama at Birmingham and adjacent to Five Points South. Highland Park has an urban feel, is popular with socially active professionals, and boasts a high percentage of renters:
- Population: 7,018
- Median sale price: $301,450
- Change in sales price (year over year): 44.0%
- Days on market: 35
- Median rent: $816
- Renter-occupied households: 65%
- Median household income: $57,516
- ZIP codes: 35205, 35222, 35233
Crestwood South
Crestwood South is ranked as the second best Birmingham neighborhood in which to buy a house by Niche.com and also is a popular place for renters. Located adjacent to the Forest Park and Crestline neighborhoods, Crestwood South has a sparse suburban feel and attracts socially active professionals:
- Population: 6,394
- Median sale price: $320,000
- Change in sales price (year over year): 12.3%
- Days on market: 44
- Median rent: $1,356
- Renter-occupied households: 34%
- Median household income: $97,137
- ZIP code: 35222
Forest Park
Located immediately west of Crestwood South, Forest Park has a mixed urban-suburban feel and is a neighborhood in Birmingham where over 50% of the residents rent their homes:
- Population: 8,267
- Median sale price: $476,000
- Change in sales price (year over year): -10.2%
- Days on market: 44
- Median rent: $997
- Renter-occupied households: 52%
- Median household income: $75,467
- ZIP code: 35222
South Eastlake
The South Eastlake neighborhood in Birmingham is conveniently located between I-59 and I-20, a little east of Downtown Birmingham. The neighborhood has a sparse suburban feel, and, even though median home prices are less than $100K, almost half of the households are occupied by renters:
- Population: 11,289
- Median sale price: $86,000
- Change in sales price (year over year): -14.9%
- Days on market: 34
- Median rent: $900
- Renter-occupied households: 49%
- Median household income: $34,119
- ZIP code: 35206
Crestline
Located near Forest Park and Crestwood South, the Crestline neighborhood in Birmingham is ranked among the best neighborhoods to live by Niche.com. The area has a mixed urban-suburban feel and is popular with Birmingham residents:
- Population: 7,051
- Median sale price: $315,500
- Change in sales price (year over year): 10.7%
- Days on market: 34
- Median rent: $1,481
- Renter-occupied households: 42%
- Median household income: $97,816
- ZIP code: 35213
Central City
The Central City neighborhood is located in Downtown Birmingham, a few blocks north of the UAB Hospital and the University of Alabama at Birmingham. The neighborhood has an urban feel and is an area of Birmingham where the majority of residents rent where they live:
- Population: 3,140
- Median sale price: $360,000
- Change in sales price (year over year): 28.6%
- Days on market: 82
- Median rent: $944
- Renter-occupied households: 79%
- Median household income: $45,984
- ZIP codes: 35203, 35222
Five Points South
Five Points South is ranked by Niche.com as the third best Birmingham neighborhood to live and also is a popular area for socially active professionals and renters. The neighborhood is home to the University of Alabama at Birmingham, UAB Hospital, and UAB Hospital-Highlands:
- Population: 18,469
- Median sale price: $280,000
- Change in sales price (year over year): 1.8%
- Days on market: 76
- Median rent: $935
- Renter-occupied households: 71%
- Median household income: $40,883
- ZIP code: 35205
Fountain Heights
The Fountain Heights neighborhood in Birmingham is bordered by Central City and Druid Hills on the east and I-65 on the west and is just north of Five Points South. Fountain Heights has an urban feel, lots of restaurants and coffee shops, and is home to a high percentage of renters:
- Population: 5,004
- Median sale price: $191,000
- Change in sales price (year over year): -43.7%
- Days on market: 153
- Median rent: $828
- Renter-occupied households: 76%
- Median household income: $35,627
- ZIP code: 35203
Southside
Located just north of Five Points South and Highland Park, the Southside neighborhood has an urban feel and is an area of Birmingham where more than 80% of the residents rent their homes:
- Population: 9,503
- Median sale price: $415,000
- Change in sales price (year over year): 7.1%
- Days on market: 304
- Median rent: $920
- Renter-occupied households: 82%
- Median household income: $33,203
- ZIP code: 35205
Druid Hills
Druid Hills is located north of Central City and Fountain Heights and is another neighborhood in Birmingham with a high percentage of renters. The neighborhood has an urban feel and some of the most affordable median home prices in Birmingham:
- Population: 4,715
- Median sale price: $40,000
- Change in sales price (year over year): -47.5%
- Days on market: 225
- Median rent: $913
- Renter-occupied households: 66%
- Median household income: $35,643
- ZIP codes: 35203, 35234
Glen Iris
Located south of Downtown and west of Five Points South, Glen Iris is rated as the most diverse neighborhood in the city and also the fifth best place to live. The Glen Iris neighborhood has an urban feel and a large percentage of renters:
- Population: 19,803
- Median sale price: $70,000
- Change in sales price (year over year): -68.3%
- Days on market: 61
- Median rent: $953
- Renter-occupied households: 66%
- Median household income: $55,040
- ZIP code: 35205
Roebuck Springs Historic District
Located northeast of Birmingham along I-59, Roebuck Springs has a sparse suburban feel and receives good grades from Niche.com for housing, jobs, and nightlife.
- Population: 10,507
- Median sale price: $175,000
- Change in sales price (year over year): -17.7%
- Days on market: 61
- Median rent: $971
- Renter-occupied households: 35%
- Median household income: $59,544
- ZIP code: 35206
Liberty Highlands
Located east of Roebuck Springs Historic District, the Liberty Highlands area of Birmingham is ranked as the seventh best neighborhood to buy a house by Niche.com. Liberty Highlands has a sparse urban feel:
- Population: 9,020
- Median sale price: $317,500
- Change in sales price (year over year): 80.4%
- Days on market: 73
- Median rent: $1,138
- Renter-occupied households: 21%
- Median household income: $59,909
- ZIP code: 35210
Hooper City
Hooper City is located just north of Birmingham along I-65 and is a popular place for families. The neighborhood has a sparse suburban feel and receives high marks for housing, jobs, and diversity:
- Population: 8,500
- Median sale price: $95,000
- Change in sales price (year over year): -25.3%
- Days on market: 39
- Median rent: $1,009
- Renter-occupied households: 21%
- Median household income: $61,235
- ZIP code: 35207
Huffman
Huffman is located near the Roebuck Springs Historic District, northeast of Birmingham along I-59. The neighborhood has a dense suburban feel, is popular with socially active professionals, and is an area of Birmingham where nearly half of the households are occupied by renters:
- Population: 7,442
- Median sale price: $167,143
- Change in sales price (year over year): 6.5%
- Days on market: 45
- Median rent: $745
- Renter-occupied households: 45%
- Median household income: $53,154
- ZIP code: 35235
>>Explore Roofstock's Birmingham investment properties.
