Now IS A Great Time To Invest In Atlanta Rental Properties
"There is money in misery," a wise friend once told me. Another said, "Big fortunes are made by those who can figure out where the crowd will be going - and beat them there."
As 2008 has shown us, you must be careful regarding which investment vehicle you use. My father once told me, "When the widows line up around the block at Stein Roe on South Wacker Drive - it’s time to get out of the stock market."
What he was referring to is that when the most unlikely investors are investing - the show is over. It’s time to get out.
The same thing could be said about real estate, as when the uncreditworthy with no money for a down payment were buying - it was time to get out. Hindsight is 20/20.
The other end of that analogy is that when markets crash - and they always crash - that’s when it’s the best time to get in… and 2008 gave us quite the crash in the Atlanta real estate market.
If you are currently renting - it’s time to stop throwing your money away and consider becoming a homeowner. And if you are already a home owner - you might want to consider becoming a landlord.
Why? Because timing is everything - and the time to act is NOW.
In previous posts, I have shown some nicer properties for those who might like to "move up" to a bigger, more expensive home. Today I want to cover the aspect of picking up less expensive properties as rentals.
For example, this property in Lithonia was built in 1989 and was last sold five years ago for $128,100. It is a three bedroom, (four, if you believe the listing agent) two and a half bath home that, according to the tax records, has 1998 square feet in heated living space. It has a two car garage, two story family room, sits on a .17 acre cul-de-sac lot, and is less than two miles from the freeway.
The tax assessment of this property for 2008 is $148,500. The four nearest sold comparables in the last six months average $97,400 with an average 1887 square footage (keep in mind that this property is larger). The tax assessments of all four comps are lower than this property - and the comp with the closest assessed value sold last September for $129,400.
As a foreclosure, it was listed five months ago for $125,000, but a combination of a sluggish housing market coupled with a seasonal lull during the holidays has forced the list price down to only $53,400. This is becoming a great opportunity for either a first-time home buyer or an investor, as the property appears to be in reasonable condition from what we can see in the pictures.
If you bought this home at the current asking price with the seller paying your closing costs; and you put 20% down ($10,680); and financed it for 15 years at an interest rate of 5.875% (which would cost you 2 points) - your monthly principal and interest would be a measly $358. Since current rents on this street are $900-950; this property can supply some serious positive cash flow after a little sprucing up. It is conceivable that this property could pay for itself in as little as 7 years!
As an owner-occupant, if you bought this home at the current asking price with the seller paying your closing costs; and you put 3.5% down ($1869); and financed it for 30 years at a 5% interest rate - your monthly principal and interest would be an even more measly $277! Either way, that’s a lot of house for the money.
This is just one example - you can find many of them using our listings search engine.
As always, if you have any questions regarding real estate in the greater Atlanta area, feel free to contact me here.