Should You Invest In Huntsville Real Estate In 2019?
Huntsville Turnkeys are hard to find these days a solid ROIs.
Investing in real estate is touted as a great way to become wealthy. Is Huntsville rental property good for investment? Planning to invest in the Huntsville, AL real estate market? Many real estate investors have asked themselves if buying a property in Huntsville is good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead.
We have already discussed the Huntsville housing market 2019 forecast for answers on why to put resources into this sizzling market. According to Homefacts statistics, there are 46 public schools in Huntsville with an average Homefacts rating of B-. The total crime rate for Huntsville is high, and there are 215 registered sex offenders residing in the city. Unemployment in Huntsville is moderate and the median home sales price is $145,053. Here are the top 10 reasons to invest in the Huntsville real estate in 2019.
1. Demographic Momentum
A housing market is stable if the population is stable in both numbers and buying power. Its long term outlook depends on birth rates, death rates, and migration rates. If young people are leaving for work, then in a few years, the housing market will start to decline.
If people are moving in to the area because of work, the housing market will see stronger growth unless housing supply is growing just as quickly. Huntsville has a population several years younger than average, and a disproportionate number of households here have children.
Given the area’s strong economy, they’re seeing people move in for work and their children staying. That alone bolsters the Huntsville Al real estate market long-term.
2. The Strong Economy
Huntsville’s strong economy also explains why Huntsville’s population growth has been grew about 5% between 2010 and 2015 while the nation as a whole only grew by 3.2%. Huntsville’s unemployment rate is less than 4%, more than a quarter less than Birmingham’s unemployment rate.
During the Great Recession that really only ended around 2016, Huntsville was an even better place to be. At the height of the Obama Recession, unemployment in Huntsville hit 9% but was 14% in Birmingham.
3. The Sheer Affordability
Housing affordability may seem like a reason not to invest in Huntsville Al housing. After all, why invest if many can afford to buy? In reality, about 20% of those living in the Huntsville Al real estate market are renting. This is a mix of military personnel, students, and those who cannot afford these relatively affordable homes.
The average home in Huntsville costs around $150,000. Homes cost around $100 per square foot, so a small starter home could cost significantly less. An investor could buy multiple affordable homes to rent out for the price of a median home in a West coast city.
4. The Hidden Luxury Market
“Rocket City” has long been home to a large high-tech workforce. This has created demand for luxury homes catering to them. Alabama’s most expensive zip code isn’t a tony neighborhood in Birmingham. No, it is 35213, the community of Mountain Brook.
The median home in this community is worth just under half a million dollars. Yes, that’s rivaling a small condo in New York or modest single family home in California, but it is incredibly expensive in a community where the median household income is less than $50,000.
This opens up the door to “affordable” luxury home investing, whether buying and flipping or buying to rent out to young executives only planning on staying for a year or two.
5. The Landlord-Friendly Climate
One perk of the Huntsville Al real estate market is how landlord friendly the area is. The return on your investment in the Huntsville Al housing market suffers if tenants don’t pay the rent for months and you face a costly battle to evict them.
Security deposits are limited to one month rent, but if they have pets, there is no limit on the add-on security deposit for pet damage. There aren’t limits on late fees, though if challenged in court, you’ll lose if they are unreasonable. Notice to terminate the lease is generally 30 days.
If the landlord doesn’t offer to renew the lease, the tenant is legally required to leave. There is a process for eviction that requires at least 17 days but likely longer. If someone violates the terms of the lease, they are limited to four “corrections” after which they can be evicted.
6. Investment Properties in Huntsville have Good ROI
The median rent for an apartment in Huntsville is around $1000 a month. When you factor in the premium charged for the privacy and space you get when renting a home, landlords charge much higher monthly rents for detached single family homes.
When combined with the relatively low price you can pay for properties, this yields a decent return on the investment unless you pay too much at the beginning.
7. Huntsville Is The Military Market
Any real estate market with a large number of enlisted personnel is going to be home to many renters, since military personnel don’t want to become long-distance landlords. Redstone Arsenal located just outside of Huntsville has been home to several departments simultaneously such as the Marshall Flight Center, the Missile Defense Agency, the Army’s Missile Command and a logistics wing.
That meant there were roughly 2000 permanently stationed personnel and ten times that many civilian contractors working at the site. The Defense Base Realignment and Closure Commission has moved some of these functions elsewhere, such as the ordinance school hosted here for a century moving to Fort Lee in Virginia.
Other functions, such as NASA’s Space Flight Center and Missile Defense wing, remained. This means that the number of military and military contracting jobs have declined but not gone away. It creates an excellent permanent class of renters for those investing in Huntsville Al housing.
8. A Fair Sized Student Market
A university is a goldmine for real estate investors, since students always rent. There are twelve colleges within fifty miles of Huntsville, Alabama. Alabama A&M, J F Drake State Technical College, and University of Alabama at Huntsville are located in Huntsville proper. The University of Alabama at Huntsville campus alone puts several thousand renters in the Huntsville Al real estate market.
9. The Growing Technology Research Sector In Huntsville
Huntsville’s early support for the space program resulted in a technology and research park here. Huntsville now has the second largest tech and research park in the United States. This attracts well-paid talent from around the world. Those relocating here for work tend to rent rather than buy since they may go somewhere else in a few years.
Others choose to rent for a while until they find the right home to buy. These high paying jobs also keep home values high in the Huntsville Al real estate market.
10. Huntsville’s Growing Biotech Sector
Huntsville has leveraged its significant technology base to cultivate a biotech industry. For example, the HudsonAlpha Institute for Biotechnology is but one biotech research facility in the four thousand acre Cummings Research Park.
This research hub rivals Research Triangle Park in North Carolina. It is R&D centers like that that explain why Huntsville has such a well-educated, well paid population. And given how many researchers move to follow the grants or upgrade their careers, many rent homes instead of buying them.
Whether renting or buying, these high paying biotech workers keep property values and rents high in the Huntsville Al real estate market.