Lineage offers properties here

Investing in Montgomery, AL rental property

Montgomery is a low-cost market where government jobs, an 8.28% gross yield, low property taxes, and insurance at about half the national average make the numbers work on renovated single-family properties. The catch is a soft rental market, with vacancy well above national and rents growing slower than the nation.

Reviewed by Patrick Roach

Montgomery is Alabama's capital, a four-county metro of about 389,000 people. Government is the base: Maxwell Air Force Base and Gunter Annex have a workforce of about 10,000, counting trainees and contractors, and government at all levels accounts for roughly a quarter of all jobs. Hyundai's assembly plant anchors the industrial side with 4,200 workers. The rental math rests on low costs. The typical single-family property yields 8.28% gross, against 7.39% nationally, property tax runs 0.97% of value in the city, and insurance costs about half the national average. The soft spots are vacancy, at 7.63% against 5.54% nationally, and rent growth of 2.02%, below the national 3.13%.

What’s changing in Montgomery, AL

Dated announcements that bring jobs. Announced means planned, and operating means people work there now.

  1. Under constructionSeptember 2025

    Meta expands its Montgomery data center campus

    More than $1.5 billion total, more than 100 permanent jobs, more than 1,500 construction workers at peak

    What it means for rentersA construction workforce this size needs housing for the length of the build, and many of those workers rent. The permanent payroll after completion is small.

    Source: Made in Alabama
  2. AnnouncedOctober 28, 2026

    Hyundai expands engine production in Montgomery for hybrids and extended-range EVs

    Nearly $450 million, 53 new full-time jobs averaging about $62,000 a year. The release's photo caption lists the capital investment as $412.9 million.

    What it means for rentersThe plant will be prepared to build the refreshed Santa Fe and the new Tucson, including hybrids. Model changes mean retooling work for local contractors and steadier orders for the parts suppliers around the plant, which supports their payrolls even when the direct hiring number is small.

    Source: Office of the Governor of Alabama
  3. OperatingApril 2026

    Diageo opens a $415 million Montgomery plant

    $415 million, a 360,000-square-foot manufacturing and warehouse site, about 100 full-time jobs, and about 750 jobs supported during construction.

    What it means for rentersThe construction phase is over, so the lasting effect is about 100 permanent jobs plus trucking and warehouse work around the site.

    Source: Yellowhammer News
Show all 5 announcements
  1. AnnouncedMarch 6, 2026

    Hyundai Power Transformers USA plans a Montgomery expansion

    $200 million and 200 new jobs. The Chamber counts 600 jobs since the company arrived in 2011. The new facility is scheduled to open in mid-2027.

    What it means for rentersTransformer plants hire welders, electricians, and machinists, and local steel and trucking suppliers see more orders. Some of the new hires will rent while they settle in.

    Source: Montgomery Chamber
  2. AnnouncedMarch 2, 2026

    DAS North America expands in Montgomery

    $77.6 million and 100 new jobs, on top of about 500 workers now. Construction is due to finish by early 2027, with full production in 2028.

    What it means for rentersDAS is an automotive supplier, so its hiring follows automaker production plans. Factory hires at this scale add working renters in the city.

    Source: Expansion Solutions
Who rents here

The institutions that fill rentals in Montgomery, AL

  • Military10,120 total workforce, $2.3 billion annual economic impact

    Maxwell Air Force Base and Gunter Annex

    Home of the Air Force's Air University. The count covers active duty, reserve and guard, trainees, civilians, and contractors (2024 statement, current as of August 2025).

    Source: Maxwell AFB
  • Government47,000 government jobs in the metro

    Federal, state, and local government

    Montgomery is the state capital. Government at all levels, including civilian federal jobs, is about a quarter of all metro employment (September 2026, preliminary).

    Source: BLS
  • Employer4,200 team members, capacity of 390,000 vehicles a year

    Hyundai Motor Manufacturing Alabama

    Builds the Santa Fe, Tucson, and other models and anchors a network of suppliers across the River Region. Team member count is from October 2026 and capacity from Hyundai's May 2025 fact sheet.

    Source: Office of the Governor of Alabama
  • EmployerMore than $1.5 billion invested, more than 100 permanent jobs

    Meta data center

    A campus of more than 1.3 million square feet. The investment is large and the payroll is small, so its main local effect is construction work (September 2025).

    Source: Made in Alabama

What Lineage offers in Montgomery

Lineage offers mostly renovated single-family properties in the Montgomery metro, priced between $150,000 and $350,000. Montgomery's housing is older and cheaper than Birmingham's or Huntsville's, so a well-done renovation is where the rent covers the loan with room to spare. Every renovated property still has to meet the Lineage Standard: no foundation issues, and at least half the useful life left on the roof, HVAC, plumbing, water heater, and electrical panel, confirmed by an inspection Lineage orders. We look across Montgomery, Autauga, and Elmore counties, where suburban tax rates run as low as 0.50%. Every property is outside flood zones and leased for 12 months to a tenant vetted by a licensed property manager before you close.

Cash ROI is the projected average yearly cash flow over 10 years on a 20% down payment, interest-only, after vacancy and maintenance. Every property’s figure comes from its own pro forma, and the assumptions behind it vary by listing. Est. cash to close is the 20% down payment plus about 5.2% of the price in estimated closing costs.

Illustrative examples. Actual returns vary based on market conditions, property performance, and financing terms. Rent figures are estimates provided by the local property manager and are not guarantees. Properties shown are representative of inventory available as of November 2026 and may no longer be available. Lineage Technologies, Inc. acts as a transaction broker and does not represent either party in a fiduciary capacity.

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By the numbers

Montgomery, AL against the national figure

The seven measures Lineage checks in every market, each beside the national figure for the same period.

  • Rent to price (gross yield)

    above national
    Montgomery, AL
    8.28%
    National
    7.39%

    Prices are low relative to rents ($1,470 typical rent, $212,889 typical value), and that is what carries the math here.

    Zillow ZORI and ZHVI, single-family · September 2026

  • Rent growth

    below national
    Montgomery, AL
    +2.02%
    National
    +3.13%

    Rents are rising, but more slowly than in most of the country.

    Zillow ZORI, single-family · September 2026

  • Jobs and population

    near national
    Montgomery, AL
    +0.38% jobs
    National
    +0.30% jobs

    Jobs are growing at about the national pace (185,300 jobs in August 2026, and 0.3% growth in preliminary September data). Population grew 0.21% to 388,747 against about 0.5% nationally, and unemployment rose to 3.7% from 3.0% a year earlier.

    BLS Current Employment Statistics; Census Bureau Vintage 2025 estimates · August 2026 (jobs); July 2025 (population)

  • Vacancy and new supply

    unfavorable
    Montgomery, AL
    7.63%
    National
    5.54%

    This is the market's weakest measure. A vendor release quoting CoStar put apartment vacancy at 11.8% in August 2026, though new apartment construction has nearly stopped, with one building permitted in 2025.

    Census ACS 2020 to 2024 five-year estimates; CoStar figure quoted in a vendor release (August 2026) · ACS 2020 to 2024; apartments August 2026

  • Landlord law

    favorable
    Montgomery, AL
    7 business days' notice
    National
    No national standard

    Alabama law is owner-friendly: deposits are capped at one month's rent, rent control is preempted statewide, and an uncontested eviction runs about three to five weeks.

    Ala. Code 35-9A-421 and 35-9A-201 · 2026

  • Insurance

    favorable
    Montgomery, AL
    $1,300 to $1,850 a year
    National
    $3,057 a year

    Premiums for the kind of property Lineage offers run about half the national homeowner average, and Alabama premiums are projected up 1% in 2026 against 4% nationally. The national figure is for owner-occupied homeowner policies, and Insurify puts Alabama's statewide homeowner average at $3,979, so the comparison is rough.

    Lineage placement experience; Insurify 2026 home insurance projections · 2026

  • Property management depth

    favorable
    Montgomery, AL
    About 10% of rent
    National
    No national benchmark

    Established local managers are available, with fewer large single-family operators than in Birmingham or Huntsville.

    Lineage market research · October 2026

Owning here

Law, taxes, and insurance

Landlord law in Alabama

Alabama law favors owners. For unpaid rent, a landlord gives written notice and the lease ends at least seven business days after the tenant receives it, unless the tenant pays in full. Eviction cases get scheduling priority, and an uncontested case typically runs three to five weeks. Security deposits are capped at one month's rent and must be returned within 60 days. Rent control is preempted statewide. Landlords give 48 hours' notice before entering.

Taxes and insurance

Alabama assesses rental property at 20% of market value with no homestead exemption. Inside the City of Montgomery the combined rate is 48.5 mills, about 0.97% of value a year, against 1.50% nationally. Most of Autauga and Elmore counties run 0.50% to 0.64%. Pike Road, with its own school levy, runs 1.38%. Insurance runs about $1,300 to $1,850 a year for the kind of property Lineage offers, about half the national average of $3,057, and Alabama premiums are projected up 1% in 2026. The national figure is for owner-occupied homeowner policies, so the comparison is rough.

Risks

What could go wrong

  • Rental vacancy is high

    At 7.63% against 5.54% nationally, vacancy is Montgomery's weakest measure, and apartment vacancy is higher still. Expect some properties to take longer to lease.

  • Rent growth is slow

    Single-family rents rose 2.02% over the year to September 2026, against 3.13% nationally.

  • Population and hiring are flat

    The metro grew 0.21% in the year to July 2025, and unemployment rose to 3.7% from 3.0% a year earlier. Government jobs, the largest block, were down 0.6% over the year.

  • Tornado and river flooding

    FEMA rates tornado and strong-wind risk relatively high in Montgomery County. The Alabama River and Catoma Creek flooded in 1990, so every property gets a flood zone check.

FAQ

Questions investors ask

Is Montgomery a good place to buy rental property?

Montgomery is a cost play. The typical single-family property yields 8.28% gross against 7.39% nationally, property taxes run 0.97% or less, and insurance costs about half the national average. Government and military employment keep demand steady. The trade-off is a soft rental market, with vacancy above national and rents rising slower than the nation.

What is the average rent in Montgomery, AL?

The typical single-family rent in the Montgomery metro was about $1,470 a month in September 2026, up 2.02% from a year earlier, according to Zillow. The national increase was 3.13%. The typical single-family property was valued at about $212,889 at the same time, which is why yields here run above national.

Is Alabama landlord friendly?

Yes. Alabama requires seven business days' notice for unpaid rent, caps security deposits at one month's rent, and bars cities from passing rent control. Eviction cases get scheduling priority, and an uncontested case usually takes three to five weeks. Deposits must be returned within 60 days of move-out.

How much are property taxes on a rental in Montgomery?

Inside the City of Montgomery, a rental pays about 0.97% of its value a year, roughly $2,065 on a $212,889 property. Most of Autauga and Elmore counties run 0.50% to 0.64%. Alabama revalues property every year, and the 7% cap on yearly increases does not carry over to a new owner.

Sources and method

Reviewed October 2026 by Patrick Roach. Every market figure is paired with a national figure for the same period. Figures were current at review and will change. This page is research, not investment advice.

Keep reading

Show all 14 sources
  1. Office of the Governor of Alabama, Hyundai investment, October 28, 2026 Accessed 2026-11-13
  2. Alabama Political Reporter, Hyundai hybrid production, September 30, 2026 Accessed 2026-11-13
  3. Hyundai Motor Manufacturing Alabama, fact sheet, May 2025 Accessed 2026-11-13
  4. Made in Alabama, Meta data center expansion, September 2025 Accessed 2026-11-13
  5. Maxwell AFB, Economic Impact Statement 2024 Accessed 2026-11-13
  6. BLS, Montgomery Economy at a Glance Accessed 2026-11-13
  7. Zillow Research, ZORI single-family rents Accessed 2026-11-13
  8. Census Bureau, ACS 2020 to 2024 five-year estimates Accessed 2026-11-13
  9. Alabama Department of Revenue, 2025 Millage Rates Accessed 2026-11-13
  10. Insurify, 2026 home insurance price projections Accessed 2026-11-13
  11. Ala. Code 35-9A-421 Accessed 2026-11-13
  12. Yellowhammer News, Diageo opens Montgomery facility, April 2026 Accessed 2026-11-13
  13. Montgomery Chamber, Hyundai Power Transformers expansion, March 6, 2026 Accessed 2026-11-13
  14. Expansion Solutions, DAS North America expansion, March 2026 Accessed 2026-11-13
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