Hi @Peter Skobic -- I would think a bigger question would be whether to buy on a street that's predominantly rentals (no matter who owns them), rather than owner-occupied. I prefer to be on a street that's more owned than rented. Less competition for tenants (if it's a desirable street), theoretically better maintained/pride in ownership ) and a stable population of folks to get to know as an owner/landlord.
@Peter Skobic I think one of the basic premises of investing is about numbers. If the numbers make sense when I calculate using my parameters I would consider buying. If the numbers don't make sense for my investment strategy then I would not consider buying. I don't really know sometimes who owns the other houses on the street, whether investors or owner occupants.
I do take into account what the other houses look like and how they are kept up though.
Thanks, @JJ Pawlowski I think I will do the same. The only thing that concerns me a bit is that I think investors are more likely to bail when things go south. For example, in many Atlanta neighborhoods half of the homes are owned by out of state investors. During the crash, when everyone wanted to sell, some of the homes sat on the market for a long time and got vandalized in the meantime. All of a sudden, boarded up homes started popping up in that street killing the values for everyone else. I'm probably just thinking of an isolated case, so it's good to get perspective from a fellow investor!
Hi @Peter Skobic -- I would think a bigger question would be whether to buy on a street that's predominantly rentals (no matter who owns them), rather than owner-occupied. I prefer to be on a street that's more owned than rented. Less competition for tenants (if it's a desirable street), theoretically better maintained/pride in ownership ) and a stable population of folks to get to know as an owner/landlord.
@Anna Watkins Great point, thanks. What would be the best way to find that out? The only thing I can think of is a tax record search for that particular street. Is that how you do it?
Hehe, in south Atlanta I'm pretty sure every neighborhood screams murder! I'm afraid to check. Do you invest in Chicago?
The majority of our investments are in Chicago. Investing in the city proper tends to be a block by block decision on the south & west side side. Not as much concern on the North Side but we check the stats anyway before pulling triggers. The safe blocks will usually have homes owned by investors & homeowners along with an active block association.
@Peter Skobic If you have access to the Georgia FMLS, you will also have access to public records and "Realist" which will provide ownership and conveyance information for all neighbors around the subject property.
@Anna Watkins I don't know the distinction you are making between rentals and investor owned. If it is being used as a rental, by definition isn't it investor owned?
Anyway, I would think a rehab to sell would be more difficult to market to an owner/occupant if all rentals on the street. However, if you are rehabbing to rent, it wouldn't really matter.
@Crystal Smith Analyzing Block to block or neighborhood crime statistics is pretty much meaningless in the areas of Atlanta Petar mentioned. It is not uncommon to have a $400K to $600K house in a "transition" neighborhood and go through a 4-way stop and hit a section of abandoned, boarded up crack houses.
@David Begley - Ah, good point. I was thinking investor as in "ginormous hedge fund investor" the ones that buy and dump in huge bunches -- Petar mentioned he was concerned about large numbers of out-of-state owners (presumably very hands-off) -- as opposed to local folks like me.
@Peter Skobic- I check online at the rental sites - padlister, Zillow, etc. for going rental rates, and also look on the street and neighborhood for SFHs currently listed or that have been listed for rent in the past few months. It gives me one way to picture the neighborhood. I just looked at a house in an area I like -- I passed because I'm not up for a big rehab job right now, but I also knew from my research that two other houses in the same short block are currently vacant and listed.
@Anna Watkins@Peter Skobic For east, west and south Atlanta, the neighborhood's public school ratings on Zillow tells me more about the neighborhood overall desirability than anything else.
I prefer neighborhoods that are pre-dominately owner-occuppied for the reasons alluded to by @Anna Watkins . In some locations, this is not a choice; or at least it is extrememly hard to find. One alternative to consider about a primarily renter-based neighborhood is whether those rentals are owned by one investor or many. If it's one major investor in the area, you can probably get a better feel as to how they run their operation (i.e., are they taking care of their units, renting to credit worthy tenets, etc.).
@Anna Watkins@Peter Skobic For east, west and south Atlanta, the neighborhood's public school ratings on Zillow tells me more about the neighborhood overall desirability than anything else.
David, I agree on the East, West and South Atlanta as far as the school ratings go. After a while, I completely stopped looking at the ratings because they are all horrifying. As far as desirability, I think that is a relative term for that area. This basically covers 70% of the wider Atlanta metro area so a huge number of people live there and I don't think they have a choice. If they can't live in Buckhead or anywhere north of the city, they are pretty much committed to bad schools and I think for a lot of them it's not even a factor. What are your thoughts?
@Peter Skobic - or commit to private schools, of which there are a gazillion in metro Atlanta. Especially buyers/renters who want to be Intown, where prices and rents are higher in Grady, Lakeside, Decatur and Druid Hills high school areas than just outside in the newly-hip but not quite "there" school zones.
Actually, if families already want a private school (and many do), it makes sense to live outside the 'good school' districts because the taxes in those zones are astronomical! Speaking personally about the City of Decatur, where property taxes are really high, to support a small but highly rated city school system.
@Anna Watkins Great point, I didn't think of it that way. Do you currently own any properties in south Atlanta? I would be curious to hear your thoughts on that area as an investment since you live within a half hour of my properties (granted in a much nicer part!) I am mostly interested in what your thoughts are on the long term prospects of south Atlanta, i.e. 10 or 15 years from now. Thanks again on your replies!
@Anna Watkins@Peter Skobic For east, west and south Atlanta, the neighborhood's public school ratings on Zillow tells me more about the neighborhood overall desirability than anything else.
David, I agree on the East, West and South Atlanta as far as the school ratings go. After a while, I completely stopped looking at the ratings because they are all horrifying. As far as desirability, I think that is a relative term for that area. This basically covers 70% of the wider Atlanta metro area so a huge number of people live there and I don't think they have a choice. If they can't live in Buckhead or anywhere north of the city, they are pretty much committed to bad schools and I think for a lot of them it's not even a factor. What are your thoughts?
Anna is 100% correct about the private school v. public school districts throwing another variable into the already murky equation. To make it even murkier, the advent of Magnet schools in Atlanta is yet another variable. You can see neighborhoods with awful rated elementary and middle school stats and then a 10 rated magnet high school thrown into the mix. I'm not sure the property tax situation is really a whole lot different down to the school district level. A Fulton County or DeKalb County tax rate will be "equal" regardless of area, although a school district like Decatur City will add on additional taxes and they have good public schools; the City of Atlanta will add on additional, but most of the schools are still sub-par.
To address your last sentence re those not in Buckhead or north Atlanta being pretty much committed to bad schools and that not being a factor is fairly accurate. For example, you mentioned (I think) you're investing in south Atlanta. An out of state investor not familiar with Atlanta may note that Woodward Academy is located in the area they wish to invest. Woodward is (I think) the oldest private school in Atlanta and one of the more prestigious; however, with a $25,000 a year per child tuition, you won't see many or any neighborhoods in the surrounding area with houses that reflect owners that could afford that tuition. Parents from all over the metro area that can afford Woodward (and can be accepted!) carpool or ride the MARTA public transportation with the school running shuttles.
I'm being long winded I know, but my own family's situation is pretty typical: We bought a house in Norcross within walking distance of Simpson Elementary, at that time a new school and Top 5 in the state. The Middle school and HS was also within walking distance. However, the middle & HS, although not "bad" wasn't as good as the elementary so we sent our kids to Greater Atlanta Christian School for middle and High School where the kids friends lived all over the City. (To further the example, the Paul Harvey rest of the story here is also interesting. About the time my eldest was in last year of Simpson Elementary, another prestigious private school (Wesleyan) campus was relocated to close proximity to our house. To capitalize, an investor did an assemblage on our street, paid me and others 2 or 3 times what we paid for our houses, razed 15 houses on 1.5 acre lots to build 29 McMansions with a "starting price in the low $1.2MMs!)
In other words, an Investor really should have some boots on the ground if investing in Atlanta because neighborhood, as well as school district, generalizations are not valid and can get you burned.
Another way to phrase that question is... Would you buy in C or D class neighborhoods?
Respectfully, no that really isn't the question. Unless you are aware of some source I'm not, how in the world can you tell if a house on a street is either investor or owner occupied by whether or not it is in a C or D neighborhood?? You can't.
The point made in the thread, is that in metro Atlanta (the example discussed in the thread) it is extremely difficult to choose an area to invest because the neighborhoods CANNOT be easily classified. You can have an A/B home on a street, go through a 4-way stop on the same street and you're suddenly in section that you'd classify as C or even D.
I've casually observed too many rentals in a neighborhood is a bad thing. However, a bad owner occupant on a street is even worse.
@Peter Skobic South Atlanta gets pretty rough. Even in 10 years from now, some of it will still be rough (but more valuable). Having said that, I bought two South Atlanta rentals this year...too cheap to pass up. They'll either be great or horrible. Ask me in 10 years!
Another way to phrase that question is... Would you buy in C or D class neighborhoods?
Respectfully, no that really isn't the question. Unless you are aware of some source I'm not, how in the world can you tell if a house on a street is either investor or owner occupied by whether or not it is in a C or D neighborhood?? You can't.
The point made in the thread, is that in metro Atlanta (the example discussed in the thread) it is extremely difficult to choose an area to invest because the neighborhoods CANNOT be easily classified. You can have an A/B home on a street, go through a 4-way stop on the same street and you're suddenly in section that you'd classify as C or even D.
My assumption is that CD are mostly investor owned and AB are mostly owner occupied. This comes from empirical observation rather than actual statistics. You think that is too blunt?
@David Begley I literally copied and pasted your post into my permanent files that I keep on the Atlanta market. You call it long winded, but I love the detail. This is what makes BP such a great resource. I would have clicked "vote" twice if I could. Do you know where I could find a simple map of the future Beltline? The map they offer on their website lacks detail and it's impossible to see which neighborhoods it's close to..
@Dooreuhn Cee Thank you for the post, I always like to see some debate. I see that you currently invest in the Chicago market. I heard that the landlord tenant laws over there are sharply tilted in the favor of the tenant. Hope you haven't had to deal with too much of that.
@Rick Baggenstoss Hahaha, I wish you the best of luck with those rentals! I am in the same position now. Just got under contract on two properties. One inside the perimeter and one just outside, both in the south. I hope we made the right decision...