Ultimate Atlanta Real Estate Investing Guide for 2024

A long-term wealth growing system that involves Buying a home, Renovating, Renting, Refinancing it, and Repeating the procedure by using the money from the mortgage refinance is called BRRRR. If you plan to increase your investments, the BRRRR is a good plan to employ. It is essential that you are qualified to receive a “cash-out” mortgage refinance for the method to work.

You improve the worth of the property above what you spent purchasing and renovating the asset. Then you take a cash-out mortgage refinance loan that is based on the higher value, and you pocket the balance. You acquire your next house with the cash-out capital and start all over again. You add income-producing assets to your balance sheet and lease income to your cash flow.

If your investment real estate portfolio is big enough, you might delegate its oversight and enjoy passive cash flow. Discover Atlanta property management professionals when you search through our directory of professionals.

Factors to Consider

Population Growth

The expansion or fall of a region’s population is an accurate gauge of its long-term appeal for rental investors. A growing population typically demonstrates busy relocation which translates to new tenants. Relocating employers are attracted to increasing cities giving secure jobs to families who move there. A growing population creates a stable base of tenants who can handle rent bumps, and a robust seller’s market if you need to sell any properties.

Property Taxes

Property taxes, upkeep, and insurance spendings are investigated by long-term lease investors for determining costs to estimate if and how the plan will be viable. Steep property taxes will decrease a property investor’s income. Steep property tax rates may signal an unstable location where costs can continue to increase and must be considered a red flag.

Price to Rent Ratio

Price to rent ratio (p/r) is a market signal that shows you how much you can expect to collect for rent. The price you can demand in a market will affect the price you are able to pay determined by the time it will take to recoup those costs. You are trying to discover a low p/r to be comfortable that you can price your rental rates high enough to reach good returns.

Median Gross Rents

Median gross rents are a clear indicator of the stability of a lease market. You need to find a location with consistent median rent growth. Shrinking rents are a bad signal to long-term investor landlords.

Median Population Age

Median population age will be similar to the age of a usual worker if an area has a strong source of renters. If people are migrating into the district, the median age will not have a challenge remaining in the range of the workforce. If you discover a high median age, your supply of renters is reducing. A vibrant economy cannot be maintained by retiring workers.

Employment Base Diversity

A varied employment base is what a wise long-term investor landlord will hunt for. If the region’s employees, who are your renters, are spread out across a diverse combination of employers, you can’t lose all of them at once (together with your property’s market worth), if a dominant enterprise in the location goes out of business.

Unemployment Rate

High unemployment means fewer renters and an unpredictable housing market. Normally strong companies lose clients when other businesses retrench people. Workers who continue to keep their jobs may discover their hours and salaries reduced. This could cause delayed rents and tenant defaults.

Income Rates

Median household and per capita income data is a beneficial tool to help you navigate the markets where the tenants you are looking for are located. Your investment research will consider rental charge and asset appreciation, which will be dependent on wage growth in the area.

Number of New Jobs Created

The robust economy that you are on the lookout for will be producing plenty of jobs on a consistent basis. An economy that produces jobs also boosts the number of stakeholders in the housing market. Your plan of leasing and purchasing additional assets requires an economy that can create enough jobs.

School Ratings

School quality in the city will have a huge influence on the local residential market. Highly-graded schools are a necessity for employers that are thinking about relocating. Dependable renters are the result of a strong job market. Home values rise with additional workers who are homebuyers. For long-term investing, be on the lookout for highly rated schools in a considered investment location.

Property Appreciation Rates

Real estate appreciation rates are an integral ingredient of your long-term investment strategy. You need to be confident that your assets will grow in market value until you want to move them. You don’t need to spend any time inspecting communities that have unsatisfactory property appreciation rates.

A short-term rental is a furnished residence where a renter stays for less than four weeks. Short-term rental owners charge a steeper price each night than in long-term rental properties. With renters moving from one place to the next, short-term rentals have to be maintained and sanitized on a continual basis.

Normal short-term renters are vacationers, home sellers who are relocating, and people traveling for business who want more than hotel accommodation. Regular property owners can rent their homes on a short-term basis via sites such as AirBnB and VRBO. A convenient method to get into real estate investing is to rent a residential property you currently keep for short terms.

The short-term property rental venture includes dealing with tenants more regularly compared to yearly rental properties. This means that landlords handle disagreements more often. You might need to protect your legal bases by engaging one of the top Atlanta real estate lawyers.

Factors to Consider

Short-Term Rental Income

Initially, determine the amount of rental revenue you need to reach your expected return. A city’s short-term rental income rates will promptly tell you when you can expect to achieve your estimated rental income figures.

Median Property Prices

When purchasing real estate for short-term rentals, you need to figure out how much you can spend. To check if a community has possibilities for investment, look at the median property prices. You can also employ median market worth in localized sections within the market to choose communities for investing.

Price Per Square Foot

Price per sq ft gives a broad picture of property prices when analyzing comparable real estate. A home with open foyers and vaulted ceilings can’t be contrasted with a traditional-style residential unit with bigger floor space. If you remember this, the price per square foot can give you a general idea of real estate prices.

Short-Term Rental Occupancy Rate

The necessity for new rental properties in an area may be determined by evaluating the short-term rental occupancy level. A market that requires more rentals will have a high occupancy rate. Low occupancy rates signify that there are already enough short-term rentals in that city.

Short-Term Rental Cash-on-Cash Return

A short-term rental’s cash-on-cash return will tell you if the purchase is a practical use of your cash. Take your projected Net Operating Income (NOI) and divide it by your investment cash budget. The percentage you get is your cash-on-cash return. When a project is profitable enough to reclaim the capital spent fast, you will receive a high percentage. Sponsored investment purchases will reap higher cash-on-cash returns because you will be utilizing less of your own capital.

Average Short-Term Rental Capitalization (Cap) Rates

One measurement conveys the value of a property as a cash flow asset — average short-term rental capitalization (cap) rate. An income-generating asset that has a high cap rate and charges market rents has a high value. Low cap rates show higher-priced real estate. You can obtain the cap rate for possible investment real estate by dividing the Net Operating Income (NOI) by the Fair Market Value or listing price of the residential property. The answer is the yearly return in a percentage.

Local Attractions

Big festivals and entertainment attractions will entice visitors who will look for short-term rental homes. If a location has places that annually hold must-see events, such as sports stadiums, universities or colleges, entertainment centers, and adventure parks, it can invite visitors from other areas on a regular basis. Natural scenic spots like mountainous areas, rivers, coastal areas, and state and national nature reserves can also bring in prospective renters.

When a property investor buys a house cheaper than its market worth, renovates it so that it becomes more valuable, and then sells the home for a return, they are known as a fix and flip investor. To get profit, the property rehabber needs to pay lower than the market price for the house and calculate what it will take to rehab the home.

You also want to know the housing market where the property is positioned. Choose a city that has a low average Days On Market (DOM) indicator. Disposing of real estate without delay will keep your costs low and secure your returns.

Help determined real estate owners in finding your company by featuring it in our catalogue of Atlanta companies that buy homes for cash and Atlanta property investors.

Also, look for real estate bird dogs in Atlanta GA. These professionals concentrate on quickly finding promising investment prospects before they are listed on the market.

Factors to Consider

Median Home Price

Median home price data is a critical gauge for estimating a future investment region. If values are high, there might not be a good supply of fixer-upper properties in the market. This is a basic component of a fix and flip market.

If your investigation shows a sudden weakening in house market worth, it could be a heads up that you will uncover real property that fits the short sale requirements. You will be notified about these opportunities by joining with short sale processors in Atlanta GA. You’ll uncover additional data regarding short sales in our extensive blog post ⁠— What Is the Process of Buying a Short Sale Home?.

Property Appreciation Rate

Are real estate values in the region on the way up, or moving down? You want a market where home values are regularly and continuously ascending. Accelerated price growth could indicate a market value bubble that isn’t sustainable. You could wind up buying high and selling low in an hectic market.

Average Renovation Costs

A comprehensive analysis of the region’s construction expenses will make a huge difference in your location choice. The time it requires for getting permits and the municipality’s regulations for a permit request will also influence your plans. To draft a detailed financial strategy, you’ll have to understand if your construction plans will have to use an architect or engineer.

Population Growth

Population increase metrics let you take a look at housing need in the region. If the population is not going up, there is not going to be an ample source of purchasers for your fixed homes.

Median Population Age

The median population age is a contributing factor that you may not have considered. The median age mustn’t be lower or higher than the age of the regular worker. Individuals in the local workforce are the most steady house buyers. People who are planning to depart the workforce or are retired have very specific housing needs.

Unemployment Rate

When checking an area for investment, keep your eyes open for low unemployment rates. The unemployment rate in a potential investment city should be less than the national average. When the local unemployment rate is lower than the state average, that is an indicator of a strong investing environment. To be able to buy your repaired houses, your prospective buyers need to have a job, and their clients as well.

Income Rates

Median household and per capita income numbers show you if you can get enough purchasers in that location for your residential properties. The majority of people who purchase a home need a mortgage loan. The borrower’s wage will show how much they can afford and if they can purchase a home. The median income numbers will show you if the region is good for your investment endeavours. You also prefer to see wages that are going up continually. Building spendings and housing prices increase over time, and you need to know that your prospective clients’ wages will also get higher.

Number of New Jobs Created

Knowing how many jobs appear annually in the area can add to your assurance in a region’s investing environment. A growing job market communicates that a larger number of people are comfortable with investing in a house there. Additional jobs also draw employees moving to the area from other districts, which further revitalizes the property market.

Hard Money Loan Rates

Short-term property investors often utilize hard money loans in place of typical loans. This enables them to immediately purchase undervalued properties. Look up Atlanta private money lenders and compare financiers’ charges.

An investor who wants to know about hard money funding options can find what they are as well as the way to use them by reading our resource for newbies titled How Does Hard Money Work?.

In real estate wholesaling, you find a house that investors may count as a lucrative opportunity and sign a sale and purchase agreement to buy it. But you do not close on it: once you control the property, you allow a real estate investor to become the buyer for a fee. The owner sells the home to the real estate investor instead of the real estate wholesaler. The wholesaler does not liquidate the residential property — they sell the rights to buy it.

This method requires using a title company that is familiar with the wholesale contract assignment procedure and is qualified and willing to manage double close transactions. Discover investor friendly title companies in Atlanta GA on our list.

To understand how wholesaling works, read our insightful article Complete Guide to Real Estate Wholesaling as an Investment Strategy. As you opt for wholesaling, add your investment company in our directory of the best wholesale property investors in Atlanta GA. This will help any potential partners to see you and get in touch.

Factors to Consider

Median Home Prices

Median home prices are instrumental to discovering regions where properties are selling in your real estate investors’ price point. Since real estate investors want properties that are on sale below market value, you will want to take note of reduced median prices as an implicit tip on the potential supply of houses that you could purchase for lower than market value.

A rapid depreciation in the price of real estate may cause the abrupt appearance of properties with owners owing more than market worth that are desired by wholesalers. This investment strategy often carries numerous unique advantages. Nonetheless, it also creates a legal risk. Find out about this from our extensive explanation Can I Wholesale a Short Sale Home?. If you determine to give it a go, make certain you have one of short sale legal advice experts in Atlanta GA and foreclosure attorneys in Atlanta GA to confer with.

Property Appreciation Rate

Median home price changes explain in clear detail the home value picture. Investors who need to resell their investment properties later, like long-term rental landlords, want a region where property market values are going up. A shrinking median home value will show a weak rental and home-buying market and will disappoint all types of real estate investors.

Population Growth

Population growth figures are essential for your prospective contract assignment buyers. If the community is growing, additional residential units are needed. This combines both leased and ‘for sale’ properties. If a community isn’t growing, it doesn’t need additional housing and real estate investors will invest somewhere else.

Median Population Age

A reliable housing market for investors is strong in all areas, particularly renters, who evolve into homebuyers, who move up into bigger properties. In order for this to happen, there has to be a dependable employment market of potential tenants and homebuyers. A location with these features will show a median population age that is the same as the working adult’s age.

Income Rates

The median household and per capita income in a stable real estate investment market need to be on the upswing. Increases in lease and purchase prices must be backed up by improving salaries in the market. Experienced investors stay out of communities with weak population salary growth numbers.

Unemployment Rate

The region’s unemployment rates will be a crucial consideration for any potential wholesale property buyer. High unemployment rate triggers a lot of renters to delay rental payments or miss payments entirely. Long-term investors who count on uninterrupted lease income will lose money in these areas. Real estate investors cannot depend on renters moving up into their homes when unemployment rates are high. Short-term investors won’t risk getting pinned down with a unit they cannot liquidate without delay.

Number of New Jobs Created

The frequency of additional jobs being generated in the community completes a real estate investor’s assessment of a prospective investment location. Job generation signifies a higher number of workers who have a need for a place to live. Employment generation is helpful for both short-term and long-term real estate investors whom you count on to acquire your sale contracts.

Average Renovation Costs

An important factor for your client investors, particularly fix and flippers, are rehab expenses in the location. Short-term investors, like home flippers, won’t make a profit if the purchase price and the renovation expenses equal to a higher amount than the After Repair Value (ARV) of the home. Below average rehab expenses make a city more attractive for your main clients — rehabbers and rental property investors.

Investing in mortgage notes (loans) works when the mortgage loan can be purchased for a lower amount than the face value. This way, the purchaser becomes the lender to the initial lender’s debtor.

Performing loans mean mortgage loans where the homeowner is always current on their payments. Performing loans are a stable provider of cash flow. Note investors also purchase non-performing loans that the investors either re-negotiate to help the borrower or foreclose on to buy the property below market value.

Eventually, you might have multiple mortgage notes and have a hard time finding additional time to oversee them on your own. When this happens, you might select from the best mortgage servicers in Atlanta GA which will make you a passive investor.

If you conclude that this plan is perfect for you, put your company in our directory of Atlanta top real estate note buying companies. Once you do this, you’ll be noticed by the lenders who promote profitable investment notes for procurement by investors like you.

Factors to Consider

Foreclosure Rates

Performing loan investors prefer markets having low foreclosure rates. If the foreclosure rates are high, the region could nevertheless be profitable for non-performing note buyers. If high foreclosure rates have caused a slow real estate market, it may be challenging to get rid of the property after you foreclose on it.

Foreclosure Laws

It is imperative for note investors to study the foreclosure regulations in their state. Are you dealing with a Deed of Trust or a mortgage? While using a mortgage, a court has to agree to a foreclosure. A Deed of Trust enables the lender to file a notice and continue to foreclosure.

Mortgage Interest Rates

Note investors take over the interest rate of the loan notes that they buy. That mortgage interest rate will unquestionably affect your returns. Mortgage interest rates are important to both performing and non-performing note buyers.

The mortgage loan rates set by traditional lending institutions aren’t equal in every market. The stronger risk taken by private lenders is shown in higher loan interest rates for their mortgage loans compared to traditional loans.

Profitable investors routinely review the interest rates in their community offered by private and traditional mortgage firms.

Demographics

An area’s demographics data assist mortgage note investors to streamline their work and effectively use their resources. It is important to know if an adequate number of citizens in the market will continue to have good paying employment and incomes in the future.
Performing note buyers want clients who will pay as agreed, generating a consistent revenue stream of mortgage payments.

Non-performing mortgage note investors are reviewing comparable elements for other reasons. If foreclosure is required, the foreclosed collateral property is more conveniently liquidated in a growing property market.

Property Values

The more equity that a borrower has in their home, the more advantageous it is for the mortgage loan holder. If the property value is not much more than the loan amount, and the lender decides to start foreclosure, the house might not generate enough to repay the lender. As loan payments decrease the amount owed, and the value of the property increases, the homeowner’s equity increases.

Property Taxes

Payments for house taxes are typically paid to the mortgage lender along with the mortgage loan payment. This way, the mortgage lender makes sure that the taxes are paid when due. If the homebuyer stops performing, unless the loan owner takes care of the taxes, they will not be paid on time. When property taxes are past due, the government’s lien jumps over any other liens to the front of the line and is satisfied first.

If a municipality has a history of increasing tax rates, the total home payments in that area are regularly growing. This makes it tough for financially strapped borrowers to stay current, so the mortgage loan could become delinquent.

Real Estate Market Strength

Both performing and non-performing note buyers can do business in a vibrant real estate environment. It is good to understand that if you need to foreclose on a collateral, you won’t have trouble obtaining an appropriate price for the property.

Growing markets often show opportunities for note buyers to originate the initial loan themselves. This is a desirable source of income for accomplished investors.

Many real estate investment companies are built as trusts termed Real Estate Investment Trusts or REITs. This was originally done as a way to permit the regular person to invest in real estate. The typical investor can afford to invest in a REIT.

Participants in REITs are entirely passive investors. The exposure that the investors are assuming is diversified within a group of investment assets. Shares in a REIT may be unloaded whenever it is agreeable for the investor. One thing you cannot do with REIT shares is to choose the investment properties. Their investment is limited to the investment properties selected by their REIT.

Mutual funds containing shares of real estate companies are called real estate investment funds. Any actual property is possessed by the real estate companies rather than the fund. Investment funds may be an affordable way to include real estate in your allocation of assets without unnecessary liability. Real estate investment funds aren’t obligated to pay dividends unlike a REIT. The return to you is created by changes in the value of the stock.

You can find a real estate fund that focuses on a particular type of real estate company, like commercial, but you cannot propose the fund’s investment assets or markets. As passive investors, fund shareholders are happy to let the directors of the fund determine all investment selections.