Updated 2026 · Based on median market data for Montgomery, AL
Home values in Montgomery, AL have appreciated at 1.9% per year. Appreciation is modest, meaning total returns will be driven primarily by cash flow rather than equity gains. This is actually preferred by many investors who want predictable, income-based returns.
If Montgomery continues appreciating at 1.9% annually, the current median of $165,000 would reach approximately $181,282 in 5 years — an equity gain of $16,282 on a property purchased at the median. With a 20% down payment of $33,000, that represents a 49% return on invested equity from appreciation alone. Combined with 5 years of NOI totaling approximately $46,811, the projected total return is $63,093 — a 191% cumulative return on the initial investment.
Population growth in Montgomery is minimal at 0.2%. Appreciation here is more likely driven by regional economic factors, inflation, and housing stock constraints rather than population-driven demand.
Smart investors evaluate both cash flow AND appreciation. In Montgomery, the 5.67% cap rate provides strong ongoing cash flow, while 1.9% annual appreciation adds an equity component. The strong cash flow here means your returns are mostly realized as income rather than paper equity — a more conservative and predictable return profile.