Atlanta – In Town or Way-Out Burbs?

[Holly Hollister]

We have 4 single family properties in town, and are in the process of looking to purchase our 5th property. However we are having trouble determining a strategy – we go back and forth between in-town lower income neighborhood with potential revitalization OR way out burbs (Canton/Woodstock) with good school systems and lower taxes. Our goal is long term buy and hold appreciation, but still need cash flow to fund future purchases. Both my husband and I work full time and we have 2 small children, so we are not looking for a major rehab, and would rather pay a little more for a mostly turnkey property. And also we utilize a property management company.

Due to the current market environment, the 1% rule is hard to come by, much less the 2% rule (does that even exist in Atlanta?). Houses appear a bit overpriced so we don’t want to buy high, but we don’t think we should sit around and wait for the bottom to fall out either, plus we are financing so we want to take advantage of the good interest rates.

So the answer is just not clear to us: newer $120-$140K property in Canton that rents for $1000-$1200, good schools, lower taxes, and swim/tennis. Or older in town property with some updates, definitely transitional neighborhood, for $90K-$120K that rents for $900-$1000 but is on the cusp of a turning neighborhood. Or do we just sit on our money and wait for a real “deal”?

Of course there is also the quality of tenant consideration, age related maintenance, etc. But what will we be glad we did in 20 years? We are in our late 30’s so have some time. Any thoughts are appreciated.

[Max Kim]

I buy anywhere in the metro area that isn't a war zone or inside the Atlanta city limits. I have been able to get properties at the 2% or greater rule in Dekalb and Clayton counties, which has also seen significant price increases. I've looked at the sketchy City of Atlanta properties, and I own a few. You can get a nice house in dekalb between $50-80k with rents of $925-1,100/month. It's a lot easier if you stick with the ones that you can sell in a few days (under $100k in a decent area) with a high rent.