When it comes to investing, real estate comes out as one of the top contenders for investing your cash. When you invest in real estate, the returns are bigger and investors have more control than simply sticking with investing in the stock market. The stock market may potentially give you a high reward but there’s also a substantial amount of risk and volatility. One day your stock investments may be worth millions and the next it can disappear just as quickly. With real estate, historically the longer you hold onto the property the more value you accumulate. Currently, as the market continues to improve, real estate is becoming more and more valuable. So, when you buy a property as the market improves, so does the value of your home over time which builds up equity. The equity is where investors make their money. However, there are other important factors to consider.
One of the most important things any real estate investor needs to ask themselves is:
“Which market/location should I invest in?”
One of the most overlooked, yet hottest booming markets right now is in the lovely southern Gulf Coast state of Alabama.
Why is that?
For starters, it ranks one of the cheapest states in the country with the nation’s lowest tax rates as well as low cost of living. Making Alabama profitable for many investors. Savvy investors are seeing a capitalization rate upwards of 9 to 18 percent. This leads to the next question:
“Where in Alabama should you invest?”
These three cities are currently on fire with no signs of slowing down. These three cities are where you should seriously consider making your next real estate investment.
The first of the three on our list is Birmingham. Birmingham ranked as the #8 hottest housing market in the US by CNN Money in 2014. Due to the strong local economy with stable jobs in manufacturing and home to 4 Fortune 100 companies, this location is ripe with real estate and investment values. This city has seen sales prices on homes increase by 7% year over year with no signs of slowing down. Considered one of the most affordable markets along with Alabama having the lowest property tax in the nation, Birmingham is second to none.
This charming city has the second lowest property taxes in the state.
With low cost of living and with median home prices at $99,900 it’s not difficult to see why investors are flocking to this area. In January 2019, the median list price for properties came in at $250K with the median sale price coming in at a whopping $350K. If you’re looking to invest in real estate, this is one market where you can find impressive returns on your investment.
Located on the stunning Gulf Coast, Mobile is the unexpected beachfront property location that many may have never considered before. Mobile is the 3rd largest city in Alabama and is home to the only Salt Water Port in the state. While more and more investors are flocking to this area and home prices beginning to climb, it’s continuing to prove to be a growing market.
This year has seen an increase in home prices by 8.4% and expected to continue to increase by 4.5% over the next year. If your considering investing in real estate in Mobile, now is the time to do so. Due to the large student population, with Mobile being home to 5 colleges, short term rentals are a hot commodity here.
Not only that, Mobile has come to agreements with AirBnB meaning short term rental with high profitability potential. Not having to worry about any local government crackdowns is another benefit of investing this oceanside city.
Alabama’s state capital has held strong as hot market for real estate investors. Over the past year, home values have increased by 4.3% and are expected to increase by 3.2% over the next year.
In addition to this, much like the other cities mentioned, Montgomery boasts a low cost of living at 5% lower than the US average. The median home are shockingly low as well. At a median of $87,100, it’s truly an investors market. Montgomery also is home to 8 colleges and with such a large student population, there is no shortage of need for short term rentals.
As you can see, Alabama is ripe with advantages for investors when it comes to real estate investing. These three locations are showing massive potential for high returns. When considering the low taxes, low cost of living, and profitability potential – this is one hot market to start diving into.
Becoming an investor is the best way to generate wealth, but what happens after you invest?
How do you protect this wealth you’re creating?
To learn more about this, the next step is to become educated on how a Series LLC works and why it is a great way to protect your assets and create anonymity. There are a multitude of factors and our experienced team of legal professionals are here to walk you through on the why and how to do this.
For those of you who are already investing in this market and are interested in learning more about Asset Protection, give us a call and schedule an appointment for a consultation with our team.
Sources: https://listwithclever.com/real-estate-blog/top-5-best-real-estate-investment-markets-in-alabama/ https://www.cnbc.com/2018/12/06/10-states-give-you-biggest-bang-for-your-real-estate-investing-buck.html http://www.noradarealestate.com/blog/mobile-al-real-estate-market/ http://www.noradarealestate.com/blog/birmingham-al-real-estate/http://www.noradarealestate.com/blog/montgomery-alabama-real-estate/https://www.inman.com/2015/12/22/why-investors-are-flocking-to-alabama-2/# https://www.entrepreneur.com/article/304860 https://money.cnn.com/gallery/real_estate/2014/01/23/hottest-housing-markets/8.html