Renovation beats Flat Rents in Atlanta

[Travis Cassell]

I'm seeing an interesting trend in the field. There is an ever increasing split between updated homes and those that have not been touched in years. On the same street, a well renovated property is often renting for several hundred dollars more per month than a dated one, and it is leasing significantly faster. In many cases, a relatively modest investment in flooring, kitchens, and fixtures is producing returns that land in the double digits when you look at the increase in annual rent. That does not even factor in reduced vacancy and fewer maintenance issues over time as well as total asset value. Of course renovated units have always brought more, but it seems like recently the gap is expanding. 

The leases that I renew without an increase are the ones where there is a product gap between what tenants want and what some owners are offering. I am curious what others in the Atlanta market are seeing right now. Are you experiencing similar rent spreads after renovations, and what kind of returns or drop off are you seeing between updated and non updated properties? 

[Mike Grinnell]

Quote from @Kevin Polite:

Quote from @Mike Grinnell:

Hey Travis.

I’m seeing the exact same thing on the management side in Atlanta right now.

From our portfolio, the clean, moderately updated product (LVP, fresh paint, modern lighting, simple but clean kitchens/baths) is leasing faster and at a clear premium over “2005‑era” rentals that haven’t been touched. In a lot of submarkets, that spread is easily a couple hundred a month, and the time on market difference is very noticeable once you get past the first renewal cycle.

What’s been most interesting for us is:

• The units I struggle to push rent on (or even renew flat) are almost always the ones where the finishes just don’t match what today’s tenants expect at that price point.
• Owners who lean into smart, targeted turns (not overbuilding) tend to see the best combo of higher rent, less vacancy, and fewer “nickel and dime” maintenance calls for the next few years.

Curious what you’re seeing by submarket. Are you noticing this more ITP vs OTP, or pretty much across the board? I’m always looking for good real‑world examples I can take back to my owners when we talk turn scopes and budgets.

What are you seeing in Decatur 30032? I'm debating whether to sale or rent as couple of properties where the tenants are leaving. Luckily, these have been long-term tenants so  I haven't had to rent a property in 7-8 years. 

I’d say 30032 is one of the ZIPs where this “finish gap” is really obvious right now, especially as the overall Atlanta market has cooled a bit from the 2021–2022 run‑up.

From what I’m seeing:

• For a standard 3/2 house in 30032, clean, reasonably updated product is typically landing in that mid‑$1,700s to low‑$2,000s range right now, depending on size, street, and how “retail ready” it feels.
• More dated “2005‑era” rentals (older floors, brown cabinets, tired paint/fixtures) are usually trading at a noticeable discount to that, often in the low‑ to mid‑$1,500s once you actually test the market and deal with longer days on market.
• The bigger lever I’m seeing isn’t just the rent number, it’s speed: updated houses that photograph well and hit what today’s tenants expect are leasing materially faster, while the dated ones tend to sit unless they’re clearly underpriced.

On the sell vs. rent question for you:

• If your houses are still in that “long‑term tenant / not touched in years” bucket, you’re basically sitting on optionality. You can either:
  • Do a smart, mid‑level turn (LVP, paint, lights, some kitchen/bath cleanup) and go after that higher‑end 30032 rent band and better tenant profile; or
  • Keep the renovation light, price more aggressively, and treat it as a cash‑flow play knowing you’re leaving some rent and resale value on the table.
• On the disposition side, Decatur pricing has softened a bit from the peak, but buyers are still paying up for well‑presented, move‑in‑ready homes, and 30032 still gets a lot of investor attention because the rent‑to‑price ratios are better than closer‑in Decatur.