Updated 2026 · Based on median market data for Tuscaloosa, AL
Tuscaloosa sits in the South with a population of 110,000 growing at 0.8% annually. The median home costs $195,000 while rents average $1,120/mo, producing an estimated cap rate of 5.23%. This is a moderate market that rewards careful deal sourcing.
Tuscaloosa works best for experienced investors with a clear strategy — Section 8, student housing, or deep value-add rehabs. The 5.23% cap rate at median prices is tight, so success depends on buying below market, forcing appreciation through renovation, or accessing above-market rent streams through niche tenant bases.
Target properties priced 15-25% below the $195,000 median — around $156,000 or less. At this price point with $1,120/mo rents, your cap rate improves to roughly 6.9%. Factor in 0.43% property taxes ($839/yr), budget 5% of gross rent for maintenance, and underwrite to a 6.2% vacancy rate. On a 20% down conventional loan at 7%, monthly PITI will run approximately $1,207.
Every deal should be evaluated individually using our calculator tools. Median data provides a starting point; actual returns depend on the specific property, financing, and your management approach.
Run the numbers on a specific Tuscaloosa property using our cap rate calculator (pre-filled with Tuscaloosa data). Compare Tuscaloosa against similar markets in the South region. If you're considering a value-add approach, try our BRRRR calculator to model a rehab scenario.