Deciding between a few areas in Atlanta for our first rental

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Deciding between a few areas in Atlanta for our first rental

Rebecca Cardona
Atlanta, GA · Member since 2019 · 10 posts · 0 votes

My husband and I have a max budget of $50k liquid cash to invest, and we are planning to purchase a buy-and-hold investment property in Atlanta in the $100k-$200k range. We’re looking at properties in Smyrna/Marietta, Stone Mountain/East Decatur like Gresham Park area, or Pittsburgh/East Point.

We know cash flow is king, but can’t help but be tempted by Pittsburgh or East Point for the potential appreciation, but CoCs seem lower with rental rates still low in those areas and home prices on the rise.

The East side seems like CoC opportunity may be better with rental comps right around the 1% of home value number, but not sure what the demand is like over there or what the appreciation opportunity will be.

Smyrna/Marietta is attractive because of the schools, but again not sure what the appreciation opportunity will be given they are a bit more mature markets. Either way, planning to hold for 10-20 years, maybe longer.

Any suggestions for us from you seasoned vets would be greatly appreciated!!

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Joel OwensBusiness Member
Moderator
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
7y

If the 50k is a bulk of your wealth then would stay away from marginal areas of GA.

If your net worth is say 5 million and this is just taking a punt on something to see if it works out then risk factor might be much less. I saw a lot of up and coming areas in Atlanta lose 75% of value in the last downturn. I do not do residential but tend to like areas that have held up pretty well over time no matter the investment cycle.

If you have 50k to invest then at 20% down might be able to do a 200k house and 10k for closing costs. In good areas that is about entry level now.

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  • Bryan MitchellPro Member
    Rental Property Investor · Columbus, GA · Member since 2016 · 623 posts · 337 votes
    7y

    I’d consider Clayton county if you only have $50K to invest. There is some appreciation and it’s a good rental market and close enough to the jobs in and around Atlanta. Previously, people avoided it, but may be worth a second look. 

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  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    7y

    If the 50k is a bulk of your wealth then would stay away from marginal areas of GA.

    If your net worth is say 5 million and this is just taking a punt on something to see if it works out then risk factor might be much less. I saw a lot of up and coming areas in Atlanta lose 75% of value in the last downturn. I do not do residential but tend to like areas that have held up pretty well over time no matter the investment cycle.

    If you have 50k to invest then at 20% down might be able to do a 200k house and 10k for closing costs. In good areas that is about entry level now.

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  • Rebecca Cardona
    OP
    Atlanta, GA · Member since 2019 · 10 posts · 0 votes
    7y

    @Bryan Mitchell thank you so much for your perspective!

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  • Rebecca Cardona
    OP
    Atlanta, GA · Member since 2019 · 10 posts · 0 votes
    7y

    @Joel Owens a very good point on the % of net wealth. Really appreciate your perspective, thank you! We’ll probably look for something with less risk for this first house.

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  • MK Boatswain
    Contractor · Atlanta, GA · Member since 2019 · 12 posts · 4 votes
    7y

    @Rebecca Cardona

    Pittsburgh/East Point are going to appreciate faster but you should check out what’s going on in Hapeville 30354 ZIP near the Porsche experience. It’s a hidden gem and your $50K will go far there! You can spend the rest on Reno.

    1Reply
  • MK Boatswain
    Contractor · Atlanta, GA · Member since 2019 · 12 posts · 4 votes
    7y

    @Rebecca Cardona

    I’m also in Atlanta and I’m looking to network with other investors. I’m interested in Single family homes and Multi Family residential Duplex/Quad.

    I own a construction company and property management company in Sandy Springs, GA.

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  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    7y

    Some of the areas being mentioned I would not touch with a ten foot pole. Got crushed the last downturn. Lot's of flips and lipstick in those areas. Economy goes down and tenants can no longer pay the rent, courts get backlogged with evictions, and the investor has a money pit that sucks away any potential cash flow for years to come.

    Any investor really needs to go drive these areas if they are looking to buy those types of products.

    An investor might do better to buy in a B area or better instead for new construction in a subdivision where the home owner rate is high and the renter ratio is low. Typically not as much cash flow but the appreciation tends to be better over time and the rent growth as well.

    If you can afford it long term the better investment areas that have been stable for decades demand a serious look. The markets that are speculative and volatile it is more of a crap shoot where you might make it big or lose everything. Areas are like stock picks. When everyone is talking about it as the next best thing that is usually when it is tapped out and the people making the money are the sellers.    

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  • Rick Baggenstoss
    Developer · Decatur, GA · Member since 2011 · 1k+ posts · 1k+ votes
    7y

    @Joel Owens can't see the value of intown living.  Not everyone, including myself agrees with him.

    @Rebecca Cardona I'd say invest closer to where you live.  Invest where you can buy a brick/low maintenance house and attract a tenant you can relate to.  I'd buy in Kennesaw, Smyrna, or Mableton on that side of town.  I also like Hapeville, parts of East Point.  

    Decatur is overbought so it's really hard to get a good deal.  A nice house Grove Park over 20 years will be worth a mint, but you'll have to endure five years of rocky roads potentially.  Maybe a property manager would be a good strategy if you buy  in an area where the tenant pool is harder to sort through.  

    Good luck!

    2Reply
  • Rebecca Cardona
    OP
    Atlanta, GA · Member since 2019 · 10 posts · 0 votes
    7y

    @Rick Baggenstoss really appreciate your insight! Think we’re going to go drive around some of the South Atlanta neighborhoods like Hapeville and such this weekend so we can really narrow our focus. We live on the East side ourselves, so Decatur was attractive given proximity, but I see what you’re saying with home prices.

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  • Rick Baggenstoss
    Developer · Decatur, GA · Member since 2011 · 1k+ posts · 1k+ votes
    7y

    On the eastside, I would look at Tucker, Chamblee, some of 30032 (Museum School eligible), and Scottsdale.  

    School ratings tend to be a lagging indicator intown.  Don't let that drive your decision so much -- proximity to a great n'hood/amenities.  That brings good tenants.   Charter schools like Drew Charter (highly ranked statewide) in Kirkwood is a good example of how you can have a poorly rated school district but a great Charter school that anchors the area.

    OTP, you have to put a lot more weight on school ratings.

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  • Steve Walker
    Member since 2018 · 6 posts · 1 vote
    7y

    Thanks for this useful info. Am looking to invest in long term holds in ATL as well and this is informative

    1Reply
  • Silas Rogers
    Rental Property Investor · Atlanta, GA · Member since 2018 · 19 posts · 1 vote
    7y

    I am also looking to invest in rental properties in the Atlanta market. Specifically a house hack using a Duplex/Triplex. I’ve looked in East Point a bit as I think it’s a hidden gem. But I Wanted to see what others thought about the Oakland City neighborhood? I know the area is changing but still seems risky. I’m worried about the tenant pool with it being my first rental property. What are your thoughts?

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  • Rick Baggenstoss
    Developer · Decatur, GA · Member since 2011 · 1k+ posts · 1k+ votes
    7y

    @Silas Rogers  Oakland City is a good place.  You do really have to drive the area and avoid run down multifamily apartments and foot traffic from busy streets, e.g. Lee.   I have GSU students living in one Oakland City house and young professionals in another. 

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  • Silas Rogers
    Rental Property Investor · Atlanta, GA · Member since 2018 · 19 posts · 1 vote
    7y

    @Rick Baggenstoss thanks for the insight!

    0Reply
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