Ultimate Atlanta Real Estate Investing Guide for 2024

The abbreviation BRRRR is a description of a long-term investment plan — Buy, Rehab, Rent, Refinance, Repeat. If you want to grow your investments, the BRRRR is a good method to utilize. This plan depends on your ability to take money out when you refinance.

You add to the value of the investment property above what you spent purchasing and rehabbing it. After that, you extract the equity you created from the asset in a “cash-out” refinance. You acquire your next investment property with the cash-out amount and do it anew. You purchase additional rental homes and constantly increase your lease income.

When your investment property portfolio is substantial enough, you may delegate its management and get passive cash flow. Locate Atlanta real property management professionals when you search through our directory of professionals.

Factors to Consider

Population Growth

Population rise or decrease tells you if you can count on reliable results from long-term investments. If the population increase in a city is strong, then new tenants are likely coming into the area. Relocating employers are drawn to rising communities offering job security to families who relocate there. Growing populations maintain a strong renter pool that can handle rent raises and home purchasers who assist in keeping your property prices high.

Property Taxes

Property taxes, ongoing upkeep expenditures, and insurance directly affect your profitability. Steep property taxes will decrease a real estate investor’s income. Communities with excessive property tax rates are not a reliable environment for short- and long-term investment and must be avoided.

Price to Rent Ratio

The price to rent ratio (p/r) is a signal of how high of a rent can be charged in comparison to the value of the investment property. The price you can charge in a location will determine the price you are able to pay determined by the number of years it will take to pay back those funds. A large price-to-rent ratio tells you that you can charge modest rent in that community, a lower ratio tells you that you can charge more.

Median Gross Rents

Median gross rents illustrate whether an area’s rental market is reliable. You are trying to find a market with stable median rent increases. You will not be able to reach your investment goals in a city where median gross rents are being reduced.

Median Population Age

Median population age should be similar to the age of a normal worker if a market has a strong source of tenants. This can also illustrate that people are migrating into the community. A high median age means that the current population is leaving the workplace with no replacement by younger workers migrating there. This isn’t promising for the forthcoming financial market of that city.

Employment Base Diversity

A greater supply of enterprises in the city will expand your chances of success. When the citizens are employed by a couple of major enterprises, even a slight disruption in their operations could cause you to lose a lot of renters and expand your risk significantly.

Unemployment Rate

It’s hard to maintain a reliable rental market when there is high unemployment. Out-of-job residents are no longer customers of yours and of related businesses, which causes a ripple effect throughout the city. This can create too many retrenchments or fewer work hours in the location. This may cause late rent payments and defaults.

Income Rates

Median household and per capita income rates tell you if an adequate amount of desirable renters reside in that market. Your investment study will use rental fees and asset appreciation, which will rely on income growth in the city.

Number of New Jobs Created

The more jobs are regularly being produced in a city, the more consistent your renter source will be. The employees who fill the new jobs will have to have a residence. This enables you to buy more rental properties and replenish current unoccupied units.

School Ratings

School rankings in the area will have a huge influence on the local housing market. Employers that are interested in relocating want good schools for their workers. Business relocation creates more tenants. Real estate values increase with additional employees who are purchasing properties. You can’t run into a dynamically expanding residential real estate market without good schools.

Property Appreciation Rates

Property appreciation rates are an important element of your long-term investment scheme. You want to ensure that the odds of your investment raising in price in that city are likely. Inferior or decreasing property value in a region under examination is inadmissible.

A furnished property where tenants stay for less than a month is considered a short-term rental. Short-term rental landlords charge more rent each night than in long-term rental business. With renters not staying long, short-term rental units need to be repaired and sanitized on a regular basis.

Home sellers waiting to close on a new property, vacationers, and corporate travelers who are staying in the area for a few days like to rent apartments short term. Anyone can turn their home into a short-term rental unit with the know-how made available by virtual home-sharing platforms like VRBO and AirBnB. A convenient way to enter real estate investing is to rent a property you already possess for short terms.

Short-term rental properties demand engaging with tenants more repeatedly than long-term rental units. This dictates that landlords face disputes more regularly. You may want to cover your legal bases by working with one of the best Atlanta investor friendly real estate lawyers.

Factors to Consider

Short-Term Rental Income

You must define the amount of rental revenue you are searching for based on your investment calculations. Being aware of the typical amount of rental fees in the city for short-term rentals will allow you to select a preferable community to invest.

Median Property Prices

Thoroughly calculate the budget that you can pay for additional investment assets. Look for locations where the budget you have to have corresponds with the existing median property prices. You can narrow your property hunt by looking at median market worth in the location’s sub-markets.

Price Per Square Foot

Price per sq ft could be confusing when you are examining different units. When the styles of prospective homes are very different, the price per sq ft might not provide a valid comparison. You can use the price per sq ft criterion to see a good overall idea of real estate values.

Short-Term Rental Occupancy Rate

The number of short-term rentals that are presently tenanted in a market is crucial knowledge for a rental unit buyer. A community that requires more rental units will have a high occupancy rate. Weak occupancy rates mean that there are already too many short-term units in that area.

Short-Term Rental Cash-on-Cash Return

To determine whether it’s a good idea to invest your capital in a specific property or area, calculate the cash-on-cash return. Take your estimated Net Operating Income (NOI) and divide it by the cash amount you’re ready to invest. The percentage you get is your cash-on-cash return. When an investment is profitable enough to pay back the investment budget quickly, you’ll have a high percentage. If you get financing for a portion of the investment amount and use less of your capital, you will realize a higher cash-on-cash return.

Average Short-Term Rental Capitalization (Cap) Rates

Another measurement conveys the market value of real estate as a return-yielding asset — average short-term rental capitalization (cap) rate. High cap rates show that investment properties are available in that market for decent prices. When investment real estate properties in an area have low cap rates, they typically will cost too much. You can determine the cap rate for potential investment property by dividing the Net Operating Income (NOI) by the market worth or purchase price of the investment property. This shows you a percentage that is the annual return, or cap rate.

Local Attractions

Short-term rental units are popular in regions where visitors are drawn by activities and entertainment sites. People come to specific locations to attend academic and athletic activities at colleges and universities, see professional sports, support their kids as they compete in fun events, party at yearly carnivals, and stop by adventure parks. At particular times of the year, regions with outdoor activities in mountainous areas, coastal locations, or near rivers and lakes will bring in crowds of tourists who require short-term residence.

When a property investor purchases a house cheaper than its market value, fixes it and makes it more valuable, and then disposes of the property for revenue, they are known as a fix and flip investor. To be successful, the flipper needs to pay less than the market price for the property and determine the amount it will cost to renovate the home.

You also have to evaluate the housing market where the home is situated. Choose a community that has a low average Days On Market (DOM) indicator. Disposing of the property promptly will keep your expenses low and secure your returns.

To help motivated property sellers discover you, place your business in our lists of cash home buyers in Atlanta IL and real estate investment firms in Atlanta IL.

Additionally, look for bird dogs for real estate investors in Atlanta IL. Professionals listed on our website will assist you by rapidly finding potentially lucrative projects ahead of them being marketed.

Factors to Consider

Median Home Price

When you hunt for a desirable region for home flipping, look into the median home price in the district. When purchase prices are high, there might not be a consistent reserve of fixer-upper real estate in the location. You must have cheaper real estate for a successful fix and flip.

If regional information indicates a fast drop in real property market values, this can indicate the availability of potential short sale houses. You will receive notifications concerning these opportunities by partnering with short sale negotiators in Atlanta IL. Discover more regarding this sort of investment explained in our guide How Do I Buy a Short Sale Property?.

Property Appreciation Rate

Are real estate prices in the area moving up, or moving down? You have to have a market where real estate values are steadily and continuously ascending. Rapid market worth increases can reflect a market value bubble that is not sustainable. You may end up purchasing high and liquidating low in an unreliable market.

Average Renovation Costs

Look closely at the potential renovation expenses so you’ll know if you can achieve your projections. Other spendings, like permits, can inflate your budget, and time which may also develop into additional disbursement. You need to know if you will have to hire other experts, such as architects or engineers, so you can be prepared for those costs.

Population Growth

Population data will inform you whether there is an expanding necessity for real estate that you can sell. When the number of citizens is not growing, there is not going to be an ample supply of homebuyers for your properties.

Median Population Age

The median residents’ age is a contributing factor that you might not have considered. If the median age is the same as the one of the average worker, it’s a good indication. Workforce are the individuals who are probable homebuyers. People who are planning to exit the workforce or are retired have very restrictive housing needs.

Unemployment Rate

When you see a location that has a low unemployment rate, it is a good sign of likely investment prospects. It must definitely be lower than the US average. If the region’s unemployment rate is lower than the state average, that is a sign of a strong investing environment. Without a dynamic employment base, a region won’t be able to provide you with qualified home purchasers.

Income Rates

Median household and per capita income are an important indication of the scalability of the real estate environment in the region. Most families need to obtain financing to purchase a home. The borrower’s wage will dictate how much they can borrow and if they can buy a house. The median income stats show you if the market is preferable for your investment plan. Scout for locations where salaries are rising. Building costs and housing purchase prices rise from time to time, and you want to be certain that your prospective homebuyers’ salaries will also improve.

Number of New Jobs Created

Knowing how many jobs are created per year in the region adds to your assurance in an area’s investing environment. More people acquire houses when the local financial market is generating jobs. Additional jobs also attract workers migrating to the location from elsewhere, which additionally revitalizes the real estate market.

Hard Money Loan Rates

Real estate investors who sell rehabbed homes frequently use hard money financing rather than traditional loans. This enables them to immediately buy desirable properties. Locate hard money loan companies in Atlanta IL and estimate their interest rates.

In case you are unfamiliar with this financing vehicle, understand more by using our article — What Is Hard Money?.

As a real estate wholesaler, you enter a sale and purchase agreement to buy a house that other investors will need. When a real estate investor who approves of the property is found, the contract is assigned to the buyer for a fee. The contracted property is sold to the investor, not the wholesaler. The wholesaler does not sell the property under contract itself — they only sell the purchase and sale agreement.

Wholesaling relies on the involvement of a title insurance company that’s experienced with assigning purchase contracts and knows how to deal with a double closing. Find Atlanta title companies that work with investors by utilizing our directory.

Our in-depth guide to wholesaling can be viewed here: A-to-Z Guide to Property Wholesaling. As you go with wholesaling, add your investment project on our list of the best wholesale real estate companies in Atlanta IL. That will enable any possible clients to locate you and reach out.

Factors to Consider

Median Home Prices

Median home values in the region will show you if your designated purchase price range is possible in that location. As real estate investors want properties that are available below market value, you will want to see reduced median purchase prices as an indirect hint on the potential supply of homes that you could acquire for below market value.

A sudden decline in real estate values could lead to a large number of ’upside-down’ properties that short sale investors look for. Wholesaling short sale houses frequently brings a number of uncommon perks. Nonetheless, be cognizant of the legal challenges. Get more details on how to wholesale a short sale in our complete instructions. When you’re ready to begin wholesaling, look through Atlanta top short sale law firms as well as Atlanta top-rated mortgage foreclosure lawyers lists to find the best counselor.

Property Appreciation Rate

Median home price fluctuations clearly illustrate the housing value in the market. Real estate investors who need to liquidate their properties later, like long-term rental investors, want a location where property prices are going up. Dropping market values show an equally poor leasing and housing market and will dismay real estate investors.

Population Growth

Population growth information is important for your potential contract purchasers. An expanding population will require additional residential units. There are more people who lease and additional customers who purchase houses. If a community is not expanding, it does not need additional residential units and investors will invest elsewhere.

Median Population Age

A robust housing market needs people who are initially leasing, then shifting into homebuyers, and then moving up in the housing market. To allow this to be possible, there needs to be a steady workforce of potential tenants and homebuyers. If the median population age is equivalent to the age of employed citizens, it signals a vibrant real estate market.

Income Rates

The median household and per capita income demonstrate steady increases historically in markets that are desirable for real estate investment. Income growth demonstrates a city that can absorb rent and housing listing price increases. Real estate investors need this in order to meet their expected profits.

Unemployment Rate

Investors will carefully evaluate the location’s unemployment rate. High unemployment rate prompts many renters to make late rent payments or miss payments entirely. Long-term real estate investors will not purchase a home in an area like that. Renters can’t level up to homeownership and existing owners cannot sell their property and shift up to a more expensive residence. Short-term investors won’t take a chance on being stuck with a house they can’t liquidate fast.

Number of New Jobs Created

The amount of new jobs being created in the community completes an investor’s review of a potential investment site. Individuals move into a market that has additional job openings and they require a place to live. This is advantageous for both short-term and long-term real estate investors whom you depend on to acquire your wholesale real estate.

Average Renovation Costs

Improvement expenses will be crucial to most investors, as they usually acquire cheap neglected homes to fix. Short-term investors, like house flippers, can’t make money if the price and the improvement costs amount to more than the After Repair Value (ARV) of the property. Look for lower average renovation costs.

Mortgage note investing professionals buy debt from lenders if they can purchase the note for less than the outstanding debt amount. This way, you become the lender to the initial lender’s borrower.

Loans that are being paid off as agreed are considered performing loans. They give you monthly passive income. Some investors buy non-performing loans because when the investor can’t successfully restructure the mortgage, they can always obtain the property at foreclosure for a below market amount.

Ultimately, you might have a lot of mortgage notes and require additional time to manage them without help. When this occurs, you could choose from the best mortgage loan servicing companies in Atlanta IL which will make you a passive investor.

If you determine to employ this strategy, affix your project to our list of promissory note buyers in Atlanta IL. Once you’ve done this, you’ll be noticed by the lenders who publicize lucrative investment notes for purchase by investors like you.

Factors to Consider

Foreclosure Rates

Performing loan investors seek regions showing low foreclosure rates. High rates might signal opportunities for non-performing mortgage note investors, however they should be careful. The neighborhood needs to be robust enough so that note investors can complete foreclosure and unload properties if required.

Foreclosure Laws

Investors need to understand their state’s laws concerning foreclosure before buying notes. Many states utilize mortgage documents and others use Deeds of Trust. Lenders may have to receive the court’s okay to foreclose on a property. A Deed of Trust authorizes the lender to file a public notice and continue to foreclosure.

Mortgage Interest Rates

Purchased mortgage notes contain an agreed interest rate. That mortgage interest rate will significantly influence your returns. Interest rates influence the plans of both sorts of mortgage note investors.

The mortgage rates set by traditional lending companies aren’t the same everywhere. The higher risk assumed by private lenders is shown in higher interest rates for their mortgage loans in comparison with conventional loans.

Successful note investors routinely review the interest rates in their region offered by private and traditional mortgage companies.

Demographics

When mortgage note investors are deciding on where to buy notes, they’ll examine the demographic statistics from reviewed markets. The city’s population increase, employment rate, job market increase, wage standards, and even its median age provide valuable data for mortgage note investors.
Note investors who specialize in performing notes choose regions where a lot of younger people maintain higher-income jobs.

Non-performing note buyers are interested in related components for different reasons. If foreclosure is necessary, the foreclosed home is more easily sold in a good property market.

Property Values

As a mortgage note buyer, you should look for borrowers having a comfortable amount of equity. If the investor has to foreclose on a mortgage loan with lacking equity, the foreclosure auction might not even repay the balance owed. As loan payments reduce the amount owed, and the value of the property increases, the homeowner’s equity goes up too.

Property Taxes

Escrows for real estate taxes are most often given to the mortgage lender along with the loan payment. By the time the property taxes are payable, there should be enough money being held to pay them. The lender will have to take over if the payments stop or the lender risks tax liens on the property. Property tax liens leapfrog over any other liens.

Because tax escrows are combined with the mortgage loan payment, increasing property taxes indicate larger mortgage payments. Borrowers who are having difficulty making their mortgage payments might drop farther behind and sooner or later default.

Real Estate Market Strength

Both performing and non-performing note investors can succeed in a growing real estate environment. It’s critical to know that if you need to foreclose on a property, you will not have difficulty receiving a good price for the collateral property.

Mortgage note investors also have a chance to create mortgage loans directly to homebuyers in reliable real estate regions. It is a supplementary phase of a note buyer’s career.

A REIT, or Real Estate Investment Trust, is a firm that makes investments in income-producing properties. This was initially invented as a method to empower the regular investor to invest in real estate. Most investors at present are able to invest in a REIT.

Shareholders’ participation in a REIT falls under passive investing. REITs manage investors’ liability with a diversified group of assets. Shares may be liquidated whenever it’s desirable for the investor. Participants in a REIT aren’t allowed to suggest or pick properties for investment. Their investment is limited to the real estate properties owned by the REIT.

Mutual funds that hold shares of real estate businesses are referred to as real estate investment funds. The fund doesn’t hold real estate — it owns interest in real estate companies. These funds make it easier for a wider variety of people to invest in real estate properties. Fund participants may not collect regular disbursements the way that REIT shareholders do. The value of a fund to an investor is the expected growth of the price of its shares.

You may select a fund that specializes in a predetermined type of real estate you’re aware of, but you don’t get to pick the location of every real estate investment. You must depend on the fund’s managers to choose which locations and assets are picked for investment.