Ever considered investing in Savannah real estate? You definitely should! The Savannah real estate market is one of the most underrated markets in the US in 2019. The market is ripe for both Airbnb Savannah short-term rentals and traditional long-term rentals. But just how exactly are potential Savannah homes for sale performing? What are the reasons to invest in the Savannah housing market? Read this blog to find out!
Savannah Real Estate Market Data
The best way to evaluate any real estate investment location is to take a look at its market data. How exactly can an investor obtain such data? By using a rental property calculator, of course! If you don’t know where to find a rental property calculator, then fear not! Click here to learn about Mashvisor’s calculator and be able to analyze any local investment location you want! In the meantime, check out the data on Savannah real estate below:
- Median Property Price: $347,816
- Price per Square Foot: $158
- Price-to-Rent Ratio: 24
- Rental Income: $1,227
- Cap Rate / Cash on Cash Return: 1.3%
- Rental Income: $3,736
- Cap Rate / Cash on Cash Return: 10.0%
- Occupancy Rate: 60%
There is definitely much to talk about when it comes to the statistics of Savannah homes for sale. We’ll now tie in this data with the reasons why real estate investors should purchase homes for sale in Savannah, GA.
Why You Should Consider Investing in Savannah Homes for Sale
There is a multitude of reasons to invest in the Savannah housing market. But, above all else, is the market’s profitability. This is most evident with its rental income, which is the number one priority of real estate investors. The rental income averages, for both traditional and Airbnb investing, of Savannah investment properties are very high, at $1,227 and $3,736, respectively. The ROI (return on investment) averages for the typical Savannah real estate investment are also impressive. By comparison, it is obvious that, on average, Airbnb Savannah short-term rentals are more lucrative than their traditional counterparts. Keep in mind, however, that the data merely represents averages. If you take the proper time to search through Savannah homes for sale and analyze them, you can find one that will perform well above this average for either rental strategy.
The profitability of Savannah investment properties comes in another, more long-term form. Of course, we are referring to appreciation or the increase of property value over time. When it comes to appreciation, Savannah homes for sale have been phenomenal as of the last decade. During the recession in the late 2000s, the majority of housing markets began losing value. Savannah, however, was one of the few markets that continued to appreciate. The appreciation rate in Savannah remains one of the highest in the US housing market. During the last year, the rate was at 7.53%, which is higher than the rates of 60% of Georgia markets and 76% of American markets. According to Neighborhood Scout, the Savannah appreciation rate of the most recent quarter was 1.98%, which equals an annual rate of 8.14%. The city’s high rental income might be why many investors invest in Savannah homes for sale, but its high appreciation rate is why they will remain in Savannah for the long-term.
The demand for Savannah rental properties is another driving force in its market. The average Savannah real estate investment has a price-to-rent ratio of 24. This means that, for the average resident, renting out a house is more affordable than buying Savannah homes for sale. This is indicative by the ownership rate in the Savannah real estate market, as roughly 60% of residents are renting out a house, according to Neighborhood Scout. The prospective tenant pool of Savannah widens, as a result, giving landlords and investors an advantage.
Cost of Living
Another motivating force for tenants, and by extension for real estate investors, is Savannah’s cost of living. The cost of living in Savannah is 12 percent lower than the US average. Savannah is also very affordable as a major city in Georgia. Savannah’s cost of living is 15 percent lower than Atlanta’s, the capital city of Georgia. It is also 3 percent lower than the cost of living in Augusta, another major city in the state. With Savannah being an affordable alternative to major cities in the state, real estate investors will definitely be able to get the biggest bang for their buck from homes for sale in Savannah, GA.
Like the Savannah housing market, the city’s economy held its own during the recession and continues to thrive. Recent job growth has been positive, at a rate of 1.4%. Future job growth is projected to continue this prosperity. Over the next 10 years, future job growth is expected to be 38.5%, which is higher than the US average of 33.5%. The city’s economy is also very diverse, with many industries ranging from tourism to port shipping. This continued economic growth will ensure more potential tenants for Savannah homes for sale.
The last, but definitely not least, reason to invest in Savannah homes for sale is for Airbnb Savannah investing. But before we discuss the success of Airbnb in the city, we need to discuss one thing: Is Airbnb legal in Savannah?
Fortunately, the answer is yes. Savannah has long been considered one of the best cities for Airbnb laws, according to the Roomscore 2016 report. This trend has held true since then. Among the most notable Airbnb regulations in Savannah are a 7 percent State Use and Sales Tax and a 6 percent Hotel Tax. For a comprehensive list of Airbnb regulations in Savannah, check out this link.
With one of the oldest histories in the nation, its no surprise Airbnb Savannah has been so successful. Savannah also offers beautiful beach locations and recreational opportunities, further strengthening its Airbnb case. This is all evident in the fact that tourists spend about $2.67 billion annually in Savannah.