Atlanta is one of the most happening places in the US now. The question now is should you invest in rental properties for sale in Atlanta?
Table of Contents
- Is Georgia Good for Rental Properties Investing?
- 9 Things to Consider When Finding Rental Properties for Sale in Atlanta
- 10 Best Neighborhoods in Atlanta for Traditional and Airbnb Rental Investment
Atlanta, Georgia. A-Town. ATL. Hotlanta. Home to famous personalities like Usher Raymond, Elton John, Shaquille O’Neal, and Dwayne “The Rock” Johnson. The home turf of sports teams Atlanta Hawks and Atlanta Braves. Famous for being burned down during the Civil War and for becoming the heart of the civil rights movement. A place filled with so much history and culture and remains one of the most popular cities in the US.
And while Atlanta, Georgia, is generally famous all over the country, the question now is, is it also a top spot among real estate investors? How do real estate investors fare in Atlanta today? Is it worth buying rental properties for sale in Atlanta at this time?
In this article, we will show you some of the ups and downs of real estate investing in A-Town. We will talk about why investing in Atlanta, Georgia real estate could work for you and how you can do it better with the help of real estate website Mashvisor. We hope to give you a better insight into Atlanta real estate market before you decide to buy rental properties for sale in the state.
Is Georgia Good for Rental Properties Investing?
When investing in Georgia real estate, you will have a few advantages compared to being in other markets. Most Georgia real estate investors get the following benefits:
- It is the eighth most populous state in the country. It means that the demand for housing is strong.
- The state’s population is expected to grow by 1.1 million by 2030.
- Forbes ranks Georgia as the sixth-best state to do business in, with a 12.0% increase in job growth year-over-year.
- It has a thriving job market as it is home to seventeen Fortune 500 companies.
- A typical Georgia home’s value has gone up by 27.7% compared to a year ago.
- It has a very strong renter’s market.
On the other hand, some of the downsides of investing in Georgia are:
- Inventory levels have gone down by 8% year over year.
- It is a red-hot seller’s market, as evidenced by months of inventory supply down 8% to a month.
- There is far more competition compared to other states.
Is It Worth Investing in Properties for Sale in Atlanta, Georgia?
Atlanta, Georgia, in particular, has a very strong economy and a growing job market. It is home to top companies like Home Depot, Coca-Cola, UPS, AT&T, and Delta Airlines, to name a few. The bustling city is also dubbed the Silicon Valley of the South with its growth as a tech hub. It is home to both Fortune 500 tech companies, as well as several other startups.
Atlanta, Georgia’s growing economy continually attracts an influx of in-migrants looking for better job opportunities. Although the cost of living in Atlanta may be slightly higher than the national average by 1.8%, it is far more affordable to live in this metropolitan area compared to NYC or San Francisco.
Another thing that lures investors into Atlanta is its relatively pleasant weather. It gets really hot and humid during the summer, but the cool days during fall and minimal snowfall in winter more than make up for it. Add to that the beautiful temperate weather during spring, and you have for yourself a very attractive location all year round.
Atlanta also gets visitors in the millions annually with its numerous tourist attractions and activities. In fact, Atlanta is the only US city to have made it to Lonely Planet’s list of Best in Travel 2022. It ranks as the fourth best place to go in the world, behind only Auckland (New Zealand), Taipei (Taiwan), and Freiburg (Germany).
So, in terms of population growth, economy, job market, and tourism, it seems like investing in Atlanta properties for sale is a sound business move.
By the Numbers
As a real estate investor, you would want to know if a certain location will give you a good return on your investment, depending on your strategy. In this case, we’ll take a look at the numbers for both the state of Georgia as well as Atlanta. We have included data for both traditional and vacation rental properties for them.
Before you start shopping for rental properties for sale in Atlanta, check out the following first.
Georgia
- Median Property Price: $539,972
- Average Price per Square Foot: $340
- Days on Market: 60
- Number of Traditional Listings: 18,482
- Monthly Traditional Rental Income: $1,864
- Traditional Cash on Cash Return: 2.14%
- Traditional Cap Rate: 2.19%
- Price to Rent Ratio: 24 (high)
- Number of Airbnb Listings: 17,477
- Monthly Airbnb Rental Income: $2,762
- Airbnb Cash on Cash Return: 2.79%
- Airbnb Cap Rate: 2.86%
- Airbnb Daily Rate: $174
- Airbnb Occupancy Rate: 46%
- Walk Score: 46
According to Mashvisor’s data as of August 2022, the state of Georgia seems a good investment location with affordable homes and above 2.00% cash on cash return for both traditional and Airbnb properties.
Atlanta
- Median Property Price: $602,295
- Average Price per Square Foot: $380
- Days on Market: 62
- Number of Traditional Listings: 3,676
- Monthly Traditional Rental Income: $2,501
- Traditional Cash on Cash Return: 2.44%
- Traditional Cap Rate: 2.50%
- Price to Rent Ratio: 20 (high)
- Number of Airbnb Listings: 4,775
- Monthly Airbnb Rental Income: $1,737
- Airbnb Cash on Cash Return: -0.08%
- Airbnb Cap Rate: -0.08%
- Airbnb Daily Rate: $144
- Airbnb Occupancy Rate: 36%
- Walk Score: 43
As you can see above, properties for both Atlanta and Georgia are still affordable, even with Atlanta’s higher median property price of $602,295. Both provide decent cash on cash returns for traditional rentals, though you’re more likely to get better Airbnb cash on cash returns elsewhere in Georgia compared to Atlanta. You might struggle to get a return on investment on an Airbnb property in Atlanta.
If you’re thinking of starting an Airbnb business in Atlanta, you might want to reconsider it, given the numbers above. As an investor, these are some things you will want to check out first before looking for Atlanta rental properties for sale.
Related: Atlanta Real Estate Market Forecast 2022
9 Things to Consider When Finding Rental Properties for Sale in Atlanta
Investing in Atlanta properties for sale can be quite expensive. Real estate investing in general is, but Atlanta real estate requires a bit more attention to detail compared to other markets. We’ve already given you the numbers according to Mashvisor’s August data. While traditional rental properties are faring decently, Atlanta Airbnb properties are a different story.
Whether you’re in the market looking for Atlanta properties for sale to convert into a traditional or vacation rental, be sure to be on the lookout for these:
1. The Property’s Intrinsic Value
One of the things you need to look for when buying an Atlanta property for sale is its intrinsic value. The simplest hack is to buy a property that is selling below its basic value. It is applicable to non-Atlanta real estate for sale, too. When you do this, you’re already a step closer to getting a good return on your investment.
2. Neighborhoods With Good to High Rental Rates
When it comes to Airbnb rental rates, Atlanta doesn’t pack as much punch as most markets where Airbnb rentals give investors a larger monthly income. It has a -0.08% cap rate and cash on cash return, which makes investing in Airbnb Atlanta something to think about.
Traditional rentals in Atlanta, on the other hand, are doing well, with over $2,500 in monthly rental income.
One good way to see if a property for sale in an Atlanta neighborhood is a profitable investment is by checking out rental comps in the area. The comparable properties will give you an idea of how much income a rental property can generate versus how much it will cost you.
3. Investing With Mashvisor
This is also where a thorough rental market analysis comes in handy. A real estate website like Mashvisor can help you come up with a highly accurate investment property analysis using actual Atlanta rental comps. It will give you access to a regularly-updated database that will provide you with realistic and precise calculations.
You can use Mashvisor’s investment property calculator to help you do the math and see if a property is worth investing in or not. Aside from its real estate heatmap, the website’s calculator can also help you find better properties for sale that line up with your investment goals.
Related: The 2022 Guide to Using Heatmap Analysis to Identify Areas for Rental Investment
4. Decent Cash on Cash Return and Cap Rates
As you look for Atlanta properties for sale, keep an eye on two metrics: the cap rate and cash on cash return. Most people loosely interchange the two, but they are different.
A cap rate assumes that the property is bought in all cash. Not a lot of people have the means to make an all-cash transaction. Cash on cash return takes into account the financing by dividing the property’s net operating income by the total amount of cash invested.
That said, when looking for Atlanta properties for sale, those with at least a 2.00% cap rate and cash on cash return will give you a decent positive cash flow.
To ensure you get a positive cash flow on your investment property, use Mashvisor’s cap rate calculator or cash on cash return calculator, whichever works best for you. These tools can help you make accurate cash flow projections and help you avoid negative cash flow properties.
To learn more about how Mashvisor can help you find profitable investment properties, schedule a demo.
5. Complies with Atlanta’s Strict Inspection Standards
Before buying any Atlanta house for sale, you need to make sure it passes all the requirements and standards set by the local government. Bringing in a licensed inspector to give the property a thorough inspection is always a wise move.
You need to ensure that before you buy and rent it out, it is structurally sound and that all the utilities and lines are in good working condition. You would also want to ensure that you don’t get an infestation and that your property is clear of molds.
Doing all of the above will help you avoid buying an overpriced property or a major fixer-upper. Your goal, after all, is to spend less and earn more.
Additionally, you also need to research Atlanta’s Airbnb regulations. Other than the typical requirements needed by Airbnb, the city of Atlanta has its own regulations for Airbnb owners. For instance, Atlanta only allows you to have two Airbnb properties max, with one as your primary residence. Ownership also comes with certain fees and taxes that are specific to Atlanta.
6. School Districts
Considering that Atlanta is a better location for traditional rentals than Airbnb properties, you should take into consideration the different schools in the area. Properties located in closer proximity to school districts tend to attract more families looking for long-term rentals.
Check out GreatSchools.com for different ratings and information on Atlanta school districts.
7. Proximity to Neighborhood Amenities
Whether you own a traditional rental or an Airbnb property, you will never go wrong if it is located in a bustling neighborhood with easy access to shopping, dining, and other similar amenities.
Part of what makes Atlanta attractive to both in-migrants and visitors is its rich culture, a wide variety of shopping and dining options, and a large entertainment scene. If your property is located in neighborhoods that are accessible to one or all of these, you’re in a good place.
8. Low Crime Rate
One of the things you need to take into account before buying any property for sale is safety and security. No one wants to live in a crime-ridden neighborhood. Talk to the Atlanta police department to see whether a particular neighborhood is safe for residents and visitors. You may also go to a public library or simply go online and do your research.
9. Property Management
Owning a rental property can be quite a handful. It is nearly comparable to holding down a full-time job, especially if you own several rental properties. Whether you live in Atlanta or not, if you want to buy a rental property for sale to start a rental property business, you need to check some property management options.
Working with property managers will allow you to do other equally important things without compromising your tenants’ and guests’ experiences on your property. Atlanta has an abundant supply of property management teams willing to help grow your business.
Related: How to Find Good Investment Properties
Engaging the services of property management companies or professionals will allow you to do other equally important things and provide satisfying experiences for your tenants or guests at the same time.
10 Best Neighborhoods in Atlanta for Traditional and Airbnb Rental Investment
As a real estate investment location, Atlanta offers different things for investors who want to go into long-term rentals and those who want to start a short-term rental business. Regardless of rental strategy, you should take the time to carefully look at the real estate market data so you can make an informed decision.
The locations below are ranked from highest to lowest cash on cash return.
5 Best Neighborhoods in Atlanta for Traditional Rental Investment
According to Mashvisor’s data as of August 2022, here are the top Atlanta neighborhoods worth investing in for traditional rentals:
1. Piedmont Heights
- Median Property Price: $748,726
- Average Price per Square Foot: $388
- Days on Market: 50
- Monthly Traditional Rental Income: $3,009
- Traditional Cash on Cash Return: 2.28%
- Traditional Cap Rate: 2.32%
- Price to Rent Ratio: 21
- Walk Score: 64
2. Oakland
- Median Property Price: $486,171
- Average Price per Square Foot: $326
- Days on Market: 36
- Monthly Traditional Rental Income: $1,949
- Traditional Cash on Cash Return: 2.17%
- Traditional Cap Rate: 2.21%
- Price to Rent Ratio: 21
- Walk Score: 82
3. Poncey-Highland
- Median Property Price: $600,668
- Average Price per Square Foot: $383
- Days on Market: 49
- Monthly Traditional Rental Income: $2,492
- Traditional Cash on Cash Return: 2.12%
- Traditional Cap Rate: 2.16%
- Price to Rent Ratio: 20
- Walk Score: 68
4. Inman Park
- Median Property Price: $544,180
- Average Price per Square Foot: $431
- Days on Market: 28
- Monthly Traditional Rental Income: $2,009
- Traditional Cash on Cash Return: 2.08%
- Traditional Cap Rate: 2.12%
- Price to Rent Ratio: 23
- Walk Score: 87
5. Loring Heights
- Median Property Price: $723,911
- Average Price per Square Foot: $374
- Days on Market: 10
- Monthly Traditional Rental Income: $2,325
- Traditional Cash on Cash Return: 1.45%
- Traditional Cap Rate: 1.47%
- Price to Rent Ratio: 26
- Walk Score: 51
To start looking for lucrative traditional rental properties for sale in Atlanta or any city and neighborhood, click here.
5 Best Neighborhoods in Atlanta for Airbnb Rental Investment
Mashvisor also gives us the following neighborhoods that are best for Airbnb rentals:
1. Oakland
- Median Property Price: $486,171
- Average Price per Square Foot: $326
- Days on Market: 36
- Monthly Airbnb Rental Income: $2,064
- Airbnb Cash on Cash Return: 1.13%
- Airbnb Cap Rate: 1.15%
- Airbnb Daily Rate: $159
- Airbnb Occupancy Rate: 39%
- Walk Score: 82
2. Atkins Park
- Median Property Price: $715,554
- Average Price per Square Foot: $340
- Days on Market: 61
- Monthly Airbnb Rental Income: $2,516
- Airbnb Cash on Cash Return: 1.06%
- Airbnb Cap Rate: 1.09%
- Airbnb Daily Rate: $150
- Airbnb Occupancy Rate: 45%
- Walk Score: 85
3. Poncey-Highland
- Median Property Price: $600,668
- Average Price per Square Foot: $383
- Days on Market: 49
- Monthly Airbnb Rental Income: $2,334
- Airbnb Cash on Cash Return: 0.56%
- Airbnb Cap Rate: 0.56%
- Airbnb Daily Rate: $145
- Airbnb Occupancy Rate: 42%
- Walk Score: 68
4. Loring Heights
- Median Property Price: $723,911
- Average Price per Square Foot: $374
- Days on Market: 10
- Monthly Airbnb Rental Income: $2,271
- Airbnb Cash on Cash Return: 0.44%
- Airbnb Cap Rate: 0.45%
- Airbnb Daily Rate: $142
- Airbnb Occupancy Rate: 34%
- Walk Score: 51
5. Piedmont Heights
- Median Property Price: $748,726
- Average Price per Square Foot: $388
- Days on Market: 50
- Monthly Airbnb Rental Income: $2,618
- Airbnb Cash on Cash Return: 0.43%
- Airbnb Cap Rate: 0.42%
- Airbnb Daily Rate: $140
- Airbnb Occupancy Rate: 35%
- Walk Score: 64
To start looking for profitable Airbnb properties for sale in Atlanta or any location of your choice, click here.
Wrapping It Up
So, should you invest in rental properties for sale in Atlanta? Given the above data plus the pros and cons, investing in Atlanta can be rewarding. It will depend, of course, on your strategy and other external factors, but overall, if you’re intent on becoming a landlord, then Atlanta might be the place for you.
Before buying any property, do your research first. Find out all you can about the neighborhood and the property before deciding. Let Mashvisor help make investment property research and analysis a lot easier for you.
To get access to our real estate investment tools, click here to sign up for a 7-day free trial of Mashvisor today, followed by 15% off for life.