Atlanta Rental Market Booming?

Question

I ran some analysis on a few properties using BP tools and the numbers I am seeing in ATL are unreal. For rental properties at-least.

Am I missing something or is the market really booming and is projected to do very well?

Matthew Nicklin · Answer

Can confirm the Atlanta rental market is hot right now. I just ran a rental listing last week with a higher rent than I was expecting and my phone rang off the hook with multiple applications. It was leased in 2 days. I was able to secure a great tenant for $75 more rent than Zillow estimated and about $100 more than some other rent estimators.

Kelly Rambo · Answer

Hi Manbir,

IMHO, yes, it is really booming here.  Atlanta has a lot going for it, in spite of our traffic woes.  With the Superbowl, a really hot MLS team (Atlanta United), the Atlanta Beltline and major corporations, it is really a great place.  As with any location, some areas can expect higher rents than others but for the most part, still strong.  If you're looking to expand your portfolio, there is always room for good, honest and fair landlords looking to provide quality housing.    Best of luck!

Account Closed · Answer

@Kelly Rambo   I love your comment there is always room for good, honest and fair landlords looking to provide quality housing. So true and welcomed.

Stan Sugarman · Answer

We own a fair number of units inside the perimeter and vacancy rate as fallen to almost zero. We usually have 3-4 strong applicants within days for any available unit. As any long term landlord will tell you vacancy and turnover are the biggest impacts on the bottom line.

Richie Choy · Answer

Second @James Mcgowan.

The market is booming and has boomed. 1% deals are very sparse in good areas. For a conservative buy-and-hold strategy that wants a B class neighborhood, the Cash on Cash is mediocre. I think finding a 1% at a higher price point is generally more profitable, but rents seems more inelastic above $1.6k/mo (don't see them growing too fast).

I think the niches are more key in a hot/saturated market - student rentals, short-term rentals, etc. If you can't get better housing prices in this part of the housing cycle, I'm looking for more revenue.

Manbir Singh · Answer

Sorry guys been MIA. Traveling right now but will post report when I’m back.

Kevin Auyong · Answer

What is the definition of unreal? I'm sure you can get some high rent quotes in rough areas. For B class or better I don't finf the numbers that great-well unless you compare it to San Francisco numbers

Matthew Nicklin · Answer

@James Mcgowan Sure I can give all the number for that deal, but this is by no means a standard deal. I was able to get the property for about 50% of ARV due to some crazy circumstances, so I don't think it would be fair to compare to your average deal. So I will use ARV just to give you an idea if you had to buy the property retail.

ARV-$180,000

Rent-$1,375

Taxes- $1,325

Maintenance Allowance/reserve for CAPEX-(10% of gross rents)-$1,650

Vacancy(One month)-$1,375

NOI- $12,150

Cap Rate without debt service- 6.75%

So numbers are not that great at full retail but again my cost basis is way lower so my numbers are much better. I would say this is about average or possibly just a little low for class A and B property around Atlanta right now. As you mentioned the numbers may look far better for class C but you will likely have more problems to deal with. I would agree that Atlanta is a great place to be a landlord but I would not say the numbers are "unreal". The numbers were far better just a few years ago when prices were lower but rents were still high.

James Mcgowan · Answer

Atlanta is hot for sure but I'm surprised that you are seeing numbers that are "unreal" unless you are in a C or below market.  Not saying they arent there, just seem to be difficult to come by.

@Matthew Nicklin , do you mind breaking out and sharing the numbers from the property you mentioned above?  Do you have full analysis or are you just referring to the actual lease up of the property?  Always a good thing to get 75 more than expected but I'm curious how that plays into the overall picture of the asset.

Keep up the good work and thanks for sharing these posts and comments about our ATL market!

Atlanta Rental Market Booming?

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