Birmingham, Alabama Rental Homes: What the Numbers Look Like
Birmingham has a big medical and university job base. It also has new build homes that rent well. Here is what the numbers look like on our current Birmingham homes.
The numbers at a glance
Our Birmingham metro homes run about $320,000 to $380,000. Typical rent is about $1,950 to $2,400 a month.
We model 25% down and a 5.8% loan rate. The cap rate (the yearly rent left after costs, divided by the price) is about 4.7% to 5.3%.
Year one cash flow runs from about negative $17 to positive $179 a month. That means some homes break even and some leave a little extra each month.
Why we like new builds here
New homes come with a builder warranty. That means the builder fixes covered problems for a set time. It can lower surprise repair bills early on.
Our new construction homes also include a free first year of property management. After that, management is a normal monthly fee.
What to watch
Year one cash flow can be thin or even negative. We tell you that up front. Some buyers pick Birmingham for steady rent and long term growth, not big monthly checks.
Check insurance and taxes for each home. They change from one home to the next.
See the Birmingham page for current numbers.
Common questions
How much do I need to put down?
We model 25% down. On a $320,000 home that is about $80,000. On a $380,000 home it is about $95,000. Closing costs are extra.
Can I lose money each month?
Yes. Our year one range starts below zero for some homes. We show you the full math before you decide.
Do I have to manage the home myself?
No. New construction homes include a free first year of property management. Fees apply after that.
These numbers are estimates, not promises. Results vary. Talk with a qualified CPA and a licensed lender before you buy.