Real Estate Agent · Woodstock, GA · Member since 2018 · 254 posts · 255 votes
The Atlanta Business Chronicle just published an interesting article showing that most of Metro Atlanta has seen double digit year over year rent growth. With pretty much every suburban area of the market seeing an increase. Just a few highlights
-In Kennesaw, one-bedroom rents climbed almost 14.5% year-over-year, followed by Stockbridge at 14%.
-Roswell: $1,180 per month, up almost 12.5% -Brookhaven: $1,470 per month, up 12% -Sandy Springs: $1,500 per month, the most expensive average cost for one-bedrooms in metro Atlanta. Rents have surged 11% since December 2019.
Hi Matthew, From my 3/2 SFR holdings in Atlanta and Chattanooga I agree that rents are going up. There is some pulling apart needed though. A 1 bed means thats a newer apartment building in nicer areas. Older apartments don't have many if any 1 beds and of course there are no 1 bed SFRs so its a non-representative statistic. Few of us own 200+ door newer apartments, whjere most here own SFRs. A 3/2 SFR will rent for some more then that 1 bed apartment.
My 3/2 SFRs in decent locations turn over so infreqjuently but I agree that I might up the rent an easy 15% each turn over every 2-4 yrs. I have a $1275 for a nice 3/2 in Norcross turning over in a few months and I'll advertise at $1600.
Read my Bullet Proof Portfolio paper linked off my BP profile 1st paragraph.
Higher the rent lower the appreciation but still Atl rents are going up dependably. I had a new rent up in Rex (Best side of Clayton), very nice new rehab. See 6406 Skyline Rd Rex ga. $1400. It took 2 months to get a good tenant and still I didn't get my desired target; family 2 kids and a dog or 2. I got the dog but no kids. Kids and dogs cause families to stay much longer.
Also;;; Not in that stat is as I aluded its intermitantly difficult to find strong teanants with good jobs and good bank balance who will agree to stay multi-years. I only take multi year stays. So many where weak or only wanted 12 mo lease. I don;t do 12 mo leases! FWIW you only get what you ask for, right?
Rent increases in SFRs and 3/2+ are lower then the apartment 1 bed stat, plus we are seeing an increasing struggle to find good tenants at the rising rents, thus limiting the rent increases. Only once did I drop the advertised rent once I list a future vacancy. I try to target just under the market when I list and do a good job of predicting where I'll get good application flow. I will never negotiate rent with an applicant, that says too weak for me..
Anyway, yes rents are going up, yes a good rental house and area in Atlanta area is a great asset and will be a good hold!! See my buying rules in th Bullet Proof paper.
Hi Matthew, From my 3/2 SFR holdings in Atlanta and Chattanooga I agree that rents are going up. There is some pulling apart needed though. A 1 bed means thats a newer apartment building in nicer areas. Older apartments don't have many if any 1 beds and of course there are no 1 bed SFRs so its a non-representative statistic. Few of us own 200+ door newer apartments, whjere most here own SFRs. A 3/2 SFR will rent for some more then that 1 bed apartment.
My 3/2 SFRs in decent locations turn over so infreqjuently but I agree that I might up the rent an easy 15% each turn over every 2-4 yrs. I have a $1275 for a nice 3/2 in Norcross turning over in a few months and I'll advertise at $1600.
Read my Bullet Proof Portfolio paper linked off my BP profile 1st paragraph.
Higher the rent lower the appreciation but still Atl rents are going up dependably. I had a new rent up in Rex (Best side of Clayton), very nice new rehab. See 6406 Skyline Rd Rex ga. $1400. It took 2 months to get a good tenant and still I didn't get my desired target; family 2 kids and a dog or 2. I got the dog but no kids. Kids and dogs cause families to stay much longer.
Also;;; Not in that stat is as I aluded its intermitantly difficult to find strong teanants with good jobs and good bank balance who will agree to stay multi-years. I only take multi year stays. So many where weak or only wanted 12 mo lease. I don;t do 12 mo leases! FWIW you only get what you ask for, right?
Rent increases in SFRs and 3/2+ are lower then the apartment 1 bed stat, plus we are seeing an increasing struggle to find good tenants at the rising rents, thus limiting the rent increases. Only once did I drop the advertised rent once I list a future vacancy. I try to target just under the market when I list and do a good job of predicting where I'll get good application flow. I will never negotiate rent with an applicant, that says too weak for me..
Anyway, yes rents are going up, yes a good rental house and area in Atlanta area is a great asset and will be a good hold!! See my buying rules in th Bullet Proof paper.
@Curt Smith I agree with you for the most part. SFRs are very different from apartments, especially 1 Bedroom apartments. Overall rents are up in most Suburbs areas, SFRs or apartments.
I put escalation clauses in all of my leases that the rent increases 5% annually. Some of my units are below market as the market has exceed 5% in some cases. I am ok with this though as I would prefer longer term tenants and keep turn costs to a minimum.
I also agree some areas can be difficult to find good quality tenants. That is why I try to invest in solid B class areas, if you venture into other areas your prospective tenant pool can be large but you may have lower credit/income tenants to choose from.
The rent growth reported checks out; we're seeing similar stats across a lot of the major secondary markets.
The impact that COVID has had in pushing primary market residents (NYC, LA), especially young people, to the next tier gateway cities (Atlanta, Charlotte, Austin, etc.) can't be understated, as the urbanization trend continues but folks are having harder times justifying pandemic NYC, so instead they're competing on a fixed number of in these gateway cities. PM's are noticing and raising rents accordingly.
Suburbs is subjective. I got tenants in two different houses in Decatur because they didn't want to live in Midtown Atlanta anymore and decided a 3br house for the about the same amount of rent as a 1br apt with all the amenities was a good deal. I wonder how this will play out next year when, hopefully, things get back to some semblance of normalcy.
@Curt Smith I agree with you for the most part. SFRs are very different from apartments, especially 1 Bedroom apartments. Overall rents are up in most Suburbs areas, SFRs or apartments.
I put escalation clauses in all of my leases that the rent increases 5% annually. Some of my units are below market as the market has exceed 5% in some cases. I am ok with this though as I would prefer longer term tenants and keep turn costs to a minimum.
I also agree some areas can be difficult to find good quality tenants. That is why I try to invest in solid B class areas, if you venture into other areas your prospective tenant pool can be large but you may have lower credit/income tenants to choose from.
Hi! I just send you a contact request. :) So, what would you consider solid B neighborhoods? Is there a general direction (NorthWest? South? East? etc) growth is occurring with still "affordable" "B" neighborhoods, decent schools, 3/2 for a long term B&H SFH?
@Julie Sisnroy I figured out a way to reverse engineer where solid B minus neighbourhoods are located. I don't recommend BB plus the houses are too expensive end up with fewer houses in more risk than a focus on middle blue collar like my bullet proof paper suggests and focus on CC plus areas.
Go to zillow Rentals click 3 bedrooms 2 bath house and check everything else except for house then put in a very narrow rent range 1200 to 1300.
Look at where that inventories located and that's where you should be buying houses. Study with those 12 to 1300 a month Reynolds look like that's your target.
If you've been a landlord for awhile and you qualify at 3 times rent take home you realise that middle blue collar dual income families can afford 1200 to 1300... thats why this location hack works. :)
@Curt Smith re thinking 1200 to 1300 is more appropriate fir my rentals up near Chattanooga. For Atlanta metro use 1400 to 1500.
Stear clear of cheaper rental areas, and only buy 3/2, 2 full baths so as to appeal to families. 1.5 bath houses are hard to rent to younger families with school age kids.
I also look for families with a dog or 2. Another reason they'll never move. :)
I put in fenced back yard just to keep families typically longer then 4 years. Many are my original tenants.
Read my bullet proof paper linked off my bp profile.
I live in ATL and am looking to purchase a SFH for a rental investment. Any recommendations for towns/neighborhoods within an hour or so radius of ATL?
I live in ATL and am looking to purchase a SFH for a rental investment. Any recommendations for towns/neighborhoods within an hour or so radius of ATL?
Todd plenty of great areas. Are you self managing or intend to use a property manager? If your self managing I would recommend staying about 45min-1 hour of where you live. I typically stick to class B areas for the best cash flow and lowest headaches. I own rentals in Marietta, Kennesaw, Woodstock, Powder Springs etc.
Thanks Matt! What sort of CoCROI do you consider a "good deal" in those areas?
Todd sorry for the delayed response, I have been out of town and just saw your reply.
It all depends on the deal and what it is. If your looking for something more turn key Cash on Cash return is probably going to be somewhere around 5-8% in todays market. If you are doing a BRRRR or very heavy value add it can be much higher. I technically have some with infinite cash on cash return, if you look at it that way as they are BRRRRs I have pulled all of my cash out of. So you cant really calculate a cash on cash return on something you have $0 in.
I live in ATL and am looking to purchase a SFH for a rental investment. Any recommendations for towns/neighborhoods within an hour or so radius of ATL?
Todd plenty of great areas. Are you self managing or intend to use a property manager? If your self managing I would recommend staying about 45min-1 hour of where you live. I typically stick to class B areas for the best cash flow and lowest headaches. I own rentals in Marietta, Kennesaw, Woodstock, Powder Springs etc.
Matt, I just started at Kennesaw recently. Seems to be in line with my price range and the schools aren't bad.