Investment Property in Atlanta (Suburb)? (Lawrenceville, Duluth: foreclosures, renter, condo)

[Home Addict]

We want to finance / purchase an investment property in Atlanta or its suburb, so that when we retire we could supplement our social security with rental income from that.

We crunched some numbers, and find that Atlanta has a decent income-to-cost ratio. We'll probably purchase in the lower-end (<60k), finance it, and hopefully get a monthly rental rate of about 1k/mo. Most likely we will visit Atlanta maybe once a year before we retire, just to make sure our investment is still there.

So... has anybody done this (out-of-state investment in Atlanta)? What area would be good to invest in? Any RE buyer's agent to recommend? Any property management company to recommend?

Thanks.

[ATLTJL]

So you want to buy a property for under $60k, then you think you can rent it out for $1k a month?

You're living in dreamland.

[Home Addict]

Hopefully. Not necessarily.

Do you have some figures that are more in sync with the current housing/rental markets in Atlanta?

[Mishap]

Rents vary wildly(along w/ house prices) here. Owning just 1 home isn't exactly going to be cost effective time wise as a landlord. You have to keep the place occupied (or pay someone to rent it out for you) and make sure they aren't cooking meth or treating the place like a boarding house for extended family. By the time you come down to evict a renter that's not paying, they'll have stolen all the copper out of the place and thrown a crazy going away party.

Houses worthy of 1k of rent tend to cost more than 60k. Foreclosures occasionally fall below that but they generally go fast and that means people that have cash. My brother's old client has ~200 homes he rents throughout Atlanta. He pretty much fits the definition of slumlord but any foreclosure under 100k, he's seen it and passed by the time you hear about it.

[red92s]

I don't think you are going to "scoop and score" a $60k foreclosure worth rehabbing from the left coast. As someone else mentioned, there are plenty of investors in the Atlanta area who will have paid cash and have the keys before you even see it online and book a plane ticket to come look. It's just not something that can be done easily as an absentee investor.

[Home Addict]

Originally Posted by Mishap

Rents vary wildly(along w/ house prices) here. Owning just 1 home isn't exactly going to be cost effective time wise as a landlord. You have to keep the place occupied (or pay someone to rent it out for you) and make sure they aren't cooking meth or treating the place like a boarding house for extended family. By the time you come down to evict a renter that's not paying, they'll have stolen all the copper out of the place and thrown a crazy going away party.

Houses worthy of 1k of rent tend to cost more than 60k. Foreclosures occasionally fall below that but they generally go fast and that means people that have cash. My brother's old client has ~200 homes he rents throughout Atlanta. He pretty much fits the definition of slumlord but any foreclosure under 100k, he's seen it and passed by the time you hear about it.

Thanks for the informative post. We plan to hire a property management company for rent/lease related issues.

Our plan is to purchase 2 properties, have the rent cover the expenses/tax/mortgages, and pay down the mortgage with extra. After 20 years, hopefully the mortgage balance will be very low, and we'd have a couple of rental homes to generate free cash-flow.

I guess the plan needs a slight adjustment, by purchasing in highly desirable neighborhoods (more expensive). The thugs would probably not want to pay higher rents if they are just going to make meth or use it as a boarding house. Instead, the home would probably be attractive to small families with a desire to live in a nice and safe neighborhood.

Does that make sense? Would it be possible to get a 100k home in Duluth/Lawrenceville/Norcross, that can rent for 1k+/mo?

[Mishap]

I think it's definitely doable if you can pull off the legwork. The management company problem is they maximize profits by using the smallest staff to cover the most homes which isn't necessarily aligned w/ your needs to protect your investment (interview them carefully). It'd be slim margins at 100k but if you're going in for LT investments then it's possible as long as you don't have to liquidate quickly or need a fast return. Definitely aim for somewhat better school districts in North Gwinnett (more Duluth)...my parents still have a home in South Gwinnett (Snellville) and things are really bad. There are plenty of McMansions but school districts are subpar meaning families of means tend not to move that direction and it was late to the overbuilding game (tons of PVC farms). My parents will be lucky to sell for what they paid for it in '91.

Given coming inflationary pressures, owning a low cost rental property definitely is a good plan. I would just do exhaustive research on what people rent in the area and due diligence on a management company. Given the added overhead of being absentee landlords, you just need to be very cautious on costs/prevailing rents.

[FlyingFox]

I would recommend finding a condo with an association that allows owners to rent their units out. That'll cover you on the exterior maintenance and landscaping and you'll just have to worry about the interior which is much more manageable.