Atlanta is a smart place to invest in real estate, as it has seen continuous growth and a need for housing. While some investment strategies ring true no matter the location, there are some tailored tips to see success in Atlanta versus other similar cities. How does real estate investment stay the same and differ between Atlanta and other large cities?
Investment Strategies in Atlanta
Since Atlanta is a large city with continuous population growth, there is a strong chance for a return on investment in real estate. However, your real estate income can go even further with a few strategies.
Choose the Right Property Management Partners
There is no shortage of property management companies in the city of Atlanta. However, not all property managers are created equal, and it’s important to be wary of who you partner with.
The wrong company can tarnish your property’s reputation and bring in the wrong types of tenants. You’ll want to do a lot of research into hiring a property manager, including reading online reviews and conducting in-person interviews.
Local Investors
In Atlanta, real estate investing is fairly competitive. With plenty of local investor companies with a good range of experience, it’s smart to team up and partner up with some to add more to your portfolio and potentially increase your income. Similar to property managers, however, be certain you vet any investor you’re thinking of partnering up with.
Turnkey Popularity
Turnkey (ready-to-move-in) properties are seeing a lot of popularity in the Atlanta area. Investing in turnkey properties can be a smart move, but be certain they’re turnkey and not just a quick flip. Inspect any property you’re thinking of purchasing.
Urban and Suburban Growth
Atlanta is seeing population growth in both urban areas (downtown) and suburban areas (surrounding housing communities). You can choose just about any area in Atlanta to see success, but focusing on one or both of these areas may be the smartest plan.
Target College Areas
College areas are great for real estate investors, as many college students will need rental spaces during their terms. You can see a lot of tenant options in these areas. If you’re not a fan of high tenant turnover, however, this may not be the type of property to buy.
Loan Types
Many investors target the Debt Service Coverage Ratio (DSCR) to qualify for a mortgage. This means obtaining the mortgage uses income from the investment property as opposed to personal income. In Georgia, the DSCR must be 1.2 or higher (or your cash flow must be at least 120% of the monthly mortgage payment).
Investment Strategies Outside of Atlanta
While many strategies that work in Atlanta also work outside of it, there are a few differences depending on where you’re investing. Look at the local housing market and population growth trends to determine when and where you’ll see the likeliest real estate investment success.
Phoenix, Arizona
Similar to Atlanta, population growth is predicted due to an increase in business opportunities. College areas are also likely to bring solid real estate income. Unlike Atlanta, which favored the buyer recently, Phoenix is a seller’s market, meaning it may cost more to obtain a property.
DSCR criteria in Arizona also differ slightly if you’re looking for a mortgage based on your rental income; it must be at least 10-25% (1.1-1.25) higher than your predicted monthly mortgage payment for your rental property.
Miami, Florida
Lately, Miami has leaned into being a buyer’s market, which can make buying investment property in this hot beach city attractive. Housing inventory is low, meaning there is a good investment opportunity, but it may be challenging to find homes.
Beach-view properties or condos and homes near good schools are likely your best bet for choosing a location. The DSCR criteria for Florida needs to be at least 1.25 (in other words, income must be at least 1.25 times more than debt payments).
San Francisco, California
The San Francisco housing market tends to favor sellers as opposed to buyers. Properties here cost a pretty penny, so you’ll need to choose wisely. Fixing and flipping properties are popular for investors for this reason.
However, the main difference in investing here would be local zoning laws and any rent control ordinances that may be in effect. Georgia does not have any rent control ordinances, so this is an adjustment. The DSCR range can be a minimum of 1.1-1.25, slightly more lenient than Miami and Atlanta.
Conclusion
Real estate investing strategies can be quite similar wherever you choose. Atlanta, Georgia, is an attractive market for investors due to population growth and a need for housing, but loan types and property management companies vary.
Other cities also need housing due to population growth, but laws and other criteria, such as rent control ordinances or DSCR, may differ from those in Atlanta. It’s important to specifically research the market for the location you’re looking at to determine the chance of success.
