Investing in Atlanta Real Estate (best neighborhoods, short sales, foreclosures)

[comkeeyn]

Hi

I am a foreigner from Singapore. Recently, we have been bombarded by many real estate agents selling Atlanta properties. A lot of good things were said about Atlanta. Some are really attractive with return of 10% to 18%.
Is it so good?
It it worthwhile?
Have the price gone up?

[ATLTJL]

Can a numeric return really be guaranteed in a marketplace that fluctuates as much as real estate?

Depending on the property, I would say it's certainly possible. But I would certainly be wary of trying to manage real estate from overseas unless you have a lot of experience with it.

[cwkimbro]

We got his pretty hard in the recession. There are lots of properties that could be bought and would most likely become more valuable with time. Many feel properties have bottomed out.

However, there is always risk. It is hard to know how much longer it will take vs. the costs of owning and maintaining property.

There are some areas where it never went down much and some areas that went up (mainly upscale areas).

We also have some dilapidated areas on the wrong side of town I wouldn't touch.

I wouldn't invest in anything that far away without -seeking- out the right kind of real estate professional to represent your interests in the area to help you understand the area, the risks, and the details. (don't just get sold by the person coming to you... seek out the advice of a professional on your own)....

I would also be very wary if any real estate that could generate 10-18% return/year without risk. I think there are properties that could given that Atlanta real estate as a whole lost $28 billion in value during the recession and at least half if not more will regain its value as we fully recover, but that could take time and there is a cost and risk to owning property.

[ATL Golfer]

I wouldn't buy anything that wasn't a foreclosure. Check out the process of buying property on the courthouse steps. Takes a ton more research, but if you do it right, a ton more money (never mind the fact that it is a ton more risk!).

[tamlym]

Originally Posted by comkeeyn

Hi
Some are really attractive with return of 10% to 18%.
Is it so good?
It it worthwhile?
Have the price gone up?

Your return is definitely possible, if you are looking at putting in less than $35k. You can find foreclosures AND short sales in this price range within the city of Atlanta. IF you are able to rent them out in the $600-$800/month range, your will have a pretty good return. But note that the property itself may not appreciate in the short term. You would only be looking at cash flow in the next 5-10 years at least. HOWEVER, please be wary of the following....

Condition of house AND neighborhood : You will need to do at least SOME cosmetic repairs in even the best case scenario. Also, the property may look great on paper, but each block on the street can dramatically differ. You do not want to end up with a rental property that NO ONE wants to rent because of the neighborhood. You really need to find a good agent that will watch out for this on your behalf since you are overseas.

Neighborhood : the houses are $30k for a reason....they're not in the best neighborhoods. You need to invest in an alarm system (minimum, and no guarantee) if the house if going to be vacant. We've had one of our rentals broken into and wiring stripped....

Property Manager : you need a really good one willing to find decent tenants. Otherwise, you'll just go nuts trying to collect rent, evict, repair, then pay again to install another new tenant....it can become a vicious cycle.

That's kinda what I can think of off the top of my head....good luck. It can be done, but with all investments, there are still risks...On the other hand, you can't even BUILD a house for that amount!

BTW, i'm not a real estate agent OR a property manager!

[comkeeyn]

Well thank everyone for the good contribution. Just a couple of questions.
1. Which locations in Atlanta are consider good locations? In short, good neighbourhoods. Which place? Which street?

2. How do you compare Orlando market with Atlanta market? (rental stabilty, net return and purchase price, insurance and property taxes?

3. Is it wise to invest in townhouses since the entire neighbourhood is taken care of?

Thks

[lastminutemom]

Townhomes/condos are generally not a good investment. Newer complexes have rental caps (usually 25 percent) that, in this market, are most likely already met and you won't be able to rent what you buy.

I am not a fan of living across the world and owning an investment property. How will you manage it?

How will you insure that the property you buy is well maintained over the long haul. Will you visit often?

Orlando has the advantage of being a huge tourist destination and so you could find, in an appropriate neighborhood, a property that could be rented by visitors. There are property management companies set up to do all the work for you, for a commission of course.

Atlanta's insurance will be cheaper of course.

In the price point you are looking at, the homes will need much work. How will you manage the process, make sure you get what you are paying for and not get ripped off?

Finally, some of the real values in ATL are in neighborhoods that have been "on the edge" of improving for the last 25 years. Turn around won't be fast. In some communities, bottom hasn't been hit, so you will actually probably see prices drop. at least a little for the next year or two.