Atlanta: Just How Good is the Rental
Rental markets – They can change in a heartbeat. So many factors work together to determine what will be the best environment or the worst environment for investors. It is important for anyone interested in investing funds in a rental property to do a his or her fair share of research.
There are five very important things to consider:
Job growth is important. How is the overall economics of the city? Is there an influx of corporations or other businesses relocating to the area? Does the city have restructuring plans that will increase the availability of jobs? These are all things to consider. Obviously, if there are jobs available, it will draw new residents or, at the very least, employ current residents. This will increase the need for residential services – including single family home and apartment/condo rentals.
Rental rates. Some areas in the U.S. have low rental rates and, depending on the financials, it could result in low profits for the landlord. It is important to review the rates of rentals similar to what you are looking to invest in to get an idea of its potential. Take into consideration if you will need to put work into the property and if you will be paying a property management team to handle it. Weigh the pros and cons carefully.
Median home prices for single- or multi- family homes. Review the comps from the area and combine it with the rental rates – determine whether this would be a safe investment or too risky due to higher home prices and not-so-high rental rates.
Cap rates. Make sure your cap rate is high enough to yield the results (rental return) that you desire.
Look at the supply and demand. Is the demand greater than the supply? Getting yourself into a market with an overflow of empty rentals is most definitely a less-than-ideal situation.
The city of Atlanta is a prime candidate for having a good rental market. It meets the most important criteria investors are looking for. First, over the last few years, rental rates have been on the rise – and still are. This has been a steady increase, rather than a dramatic jump.
The housing market in Atlanta is weak. It seems that much of the homes that are currently on the market have been for quite some time and are not of much interest. Until further construction growth, most individuals looking for homes may settle for rentals. Investors may get a good deal on these properties, with a little work to make it a newly desired residence.
The job market in Atlanta is one of the top in the country. While many other cities are going stagnant with economic growth, Atlanta is booming. Tens of thousands of jobs are being created every year. This city is the home for many major Fortune 500 and Fortune 1000 companies, as well as corporate headquarters for many others. With the high percentage of college graduates and the boasting employment line, there does not appear to be a slowdown in sight for Atlanta’s economic growth.
Lastly, the demand is there. While the supply may be scarce, there are individuals looking for rentals. This is a good sign for any smart investor.
So, again – just how good is Atlanta’s rental market? It is one of the best. Don’t make the mistake of passing up the opportunity of this great city.