If you are wondering how to get better at investing in property in Alabama, I have some expert tips for you.
Alabama’s population is estimated to be 4.90 million and is growing steadily according to Census Projections for 2019. There is also a growing demand for STEM workers, nurses, retail salesperson and heavy tractor trailer truck drivers according to an article on the WOTK website. The median rent price for homes in Alabama is $1,050 according to Zillow, which is almost as high as the national median rent. Alabama’s steady population growth and the growth in job opportunities will lead to high demand for residential properties. This is a huge opportunity for people thinking of investing in property.
Getting the money to Invest
The first and most important thing that determines how and where you invest in property is the amount of money you have. You can get the money through an income property mortgage or by dipping into your 401K, IRA or stocks and bonds. The more money you have the more features you can add to your investment property. More funds also mean more investment property options. Just perform a comprehensive look into your personal portfolio first, and decide where you will get the money.
Choosing areas to invest
If you are planning to buy a house and then sell it later for a profit, consider foreclosed homes that you can renovate, or buy houses where demand is likely to rise significantly. Buying and renovating is easy for experienced house flippers, but can be a huge challenge for beginners who haven’t done their research. The best house to flip is one that is located in an area that is gaining value. It could be a school district, local government district, or so on. Currently, the median price for homes listed in Alabama is $218,000 and home values have gone up by 2 percent according to Zillow.
If you are thinking of investing in rental property, you need to understand that you’re buying that property for the long-term. Buying in areas considered high return can seem like great strategy, but there is a risk that these areas are not going to improve further than they have. High return areas that have stagnated may also experience a steady decline in the future. The better route is to buy in areas that may seem rough but have high potential of growing into high return areas in the future.
How to spot growing areas
If an area is experiencing steady population growth in Birmingham, then that could be an indication that there is high demand for rentals. However, you should also pay attention to the demographics of the population growth. A growing population of families with children, and steady jobs and incomes, may be a sign that you will benefit from tenant stability.
As another example, in Huntsville, there is a growing population of baby boomers. It was ranked by Forbes as one of the top places to retire. That would be another indicator of housing need.
Whether you are buying to sell for profit or you are only interested in rental properties, concentrate on providing houses or apartments that people migrating to Alabama want. It may help if you know the specific cities, states or towns they are migrating from, and their occupations.