Atlanta’s strong economy is really supporting its housing market, showing us positive signs for a multi family real estate investment in 2019.
Atlanta Real Estate Market Outlook
Atlanta real estate investors have all the right things going for them. With the Atlanta metro experiencing continued growth in both the job market and population, it’s no surprise it has such a strong and dynamic economy in 2019.
Atlanta has been poised as one of the top multi family investment markets, and its market expansion this year is keeping investor activity up. Here are the key Atlanta real estate market trends to know if you’re planning on buying a multi family home for investment this year.
Positive Employment Trends and Population Growth
The recent local development in major companies like Starbucks Coffee, Inspire Brands, and ThyssenKrupp Elevator Americas represents about 2000 new jobs for the Atlanta metro area. The metro has continued to experience employment growth at an average annual rate of 2.5 percent during the market’s recovery after the recession. And this relocation of job seekers to the Atlanta real estate market is keeping apartment demand up. This is what you want to hear when investing in multi family homes.
Constant expansion in career opportunities gives Atlanta a very well-skilled labor force. This and a couple of other attractive factors is what draws corporate headquarters (like Mercedes-Benz and Norfolk-Southern) to the city. So far, these factors and more, have allowed the Atlanta metro to create more than 60,000 new jobs since last year. The largest growth is found in the educational and health services industry of the job market (14,700 new jobs in a year).
With more and more job opportunities in the city comes population growth. This trend is one of the key fundamentals of multi family investments in the Atlanta real estate market The Atlanta Metro is one of the top 10 regions projected to experience strong population growth. The area has a projected 5-year population growth of 571,100.
Atlanta Multi Family Investment Trends
Everything we mentioned above is already enough to promote investor activity in the Atlanta real estate market. However, that’s not all. Investing in Atlanta real estate is a smart choice due to the current rate of rent growth.
According to a market report by the Institutional Property Advisors, average effective rent for multi family investment properties in Atlanta went up 6.8 percent, with class C multi family properties experiencing the largest increase in rent of 8.6 percent. Atlanta real estate investors with multi family homes have witnessed rent growth higher than the national average, along with cap rates higher than the majority of the East Coast. This is true regardless of their investment strategy (value-add, opportunistic, etc.) or the class of the multi family property (A, B, C, D).
Another important stat for anyone considering buying multi family homes for sale in Atlanta is the vacancy rate. The vacancy rate of Atlanta multi family properties has been dropping. Right now, these properties have a vacancy rate of 5.3 percent. What’s so impressive about this piece of data? The fact that this rate is 60 basis points below what it was last year. Some neighborhoods which experienced an influx of new residents, like the Chamblee/Brookhaven submarket, have an even lower vacancy rate of 4.9 percent.
Construction in the Atlanta Real Estate Market
The Atlanta real estate market is bustling with construction activity. An estimated 11,300 new units are under construction and will be completed and put on the market in 2019. While the overall state of the Atlanta real estate market is currently neutral (neither a seller’s market or a buyer’s market), this influx of new supply will cause an imbalance in the market, giving property buyers the upper hand.
Expecting to find a lot more Atlanta investment properties for sale throughout the year, this isn’t even the largest annual construction delivery of new apartments. The peak year for the construction of new multi family homes for sale in Atlanta was 2017, where 13,770 new apartments were delivered to the market. This year’s construction is not to be unappreciated, however, as it is the second-largest cycle delivery.
The strong economic activity, job growth, renter, and investor demand will absorb this new construction in the Atlanta real estate market quite well. So overall prospects for the multi family market in Atlanta are positive for 2019.
Atlanta Multi Family Properties: Mashvisor’s Rental Property Analysis Data
No matter the type of Atlanta real estate investment you make, conducting a thorough investment analysis is vital. Using Mashvisor’s investment property calculator, we’ve put together a quick summary of all the important data you need before buying a multi family Atlanta investment property:
- Median Property Price: $534,923
- Price per Square Foot: $203
- Price to Rent Ratio: 21
- Average Days on Market: 76
- Monthly Traditional Rental Income: $2,150
- Traditional Cash on Cash Return: 2%
If you didn’t want to start your search for multi family homes for sale in Atlanta before, you’ll definitely want to after seeing the data on their strong rental performance.
5 Best Atlanta Neighborhoods for a Multi Family Investment in 2019
Which Atlanta submarkets are showing the best prospects for a successful multi family investment? Again, using Mashvisor’s data, we’ve composed a list of the top-performing neighborhoods in the Atlanta real estate market.
- Median Property Price: $656,667
- Price per Square Foot: $231
- Price to Rent Ratio: 15
- Average Days on Market: 112
- Monthly Traditional Rental Income: $3,684
- Traditional Cash on Cash Return: 6.0%
- Median Property Price: $115,000
- Price per Square Foot: $71
- Price to Rent Ratio: 7
- Average Days on Market: 94
- Monthly Traditional Rental Income: $1,351
- Traditional Cash on Cash Return: 4.7%
- Median Property Price: $450,000
- Price per Square Foot: $126
- Price to Rent Ratio: 24
- Average Days on Market: 2
- Monthly Traditional Rental Income: $1,555
- Traditional Cash on Cash Return: 4.1%
- Median Property Price: $290,000
- Price to Rent Ratio: 9
- Average Days on Market: 35
- Monthly Traditional Rental Income: $2,840
- Traditional Cash on Cash Return: 3.1%
Lindridge – Martin Manor
- Median Property Price: $999,999
- Price to Rent Ratio: 31
- Average Days on Market: 354
- Monthly Traditional Rental Income: $2,691
- Traditional Cash on Cash Return: 2.5%
As you can see, some of these neighborhoods are experiencing different trends (median price, days on market, cash on cash return). So, review the data and choose the right place to invest for your strategy.
If you’re interested in getting access to more data like this on rental property performance in Atlanta (like Airbnb data, for example), learn about your options for signing up for our services.