Buckhead Condo as Investment? (Atlanta: real estate, apartment, foreclosures)

[nyc2020]

I've been a landlord here in the dc area for over a year. Just a 1 BR condo rented out at 1300/mo. It's gone well as the value has gone up 30% since i bought it and the tenant is taking good care of the unit and paying on time. After taxes, condo fee, etc. i net around 800/mo (i carry no mortgage)

The days of buying rental condos in this area are long gone though. I noticed on redfin down in buckhead there are decent 1 BR condos going for 60 - 80k, and they have a rental estimate of around 1,000, 250-300 condo fee, 1500/yr taxes. if these figures are somewhat accurate, i could put in 70k and get a net rental gain of 500/month (i would pay cash). This seems reasonable but my question is about the resale value in 5-10 yrs. Will there be much movement? I thought real estate in the ATL has rebounded a lot the past year or two. do these prices reflect the rebound?

are there other good rental opportunities in the area? i'm thinking 5-10 yr period.

[gerrythesnake]

Heck yeah. Once the tenant list for BUCKHEAD Atlanta is announced next year and once it opens next year im sure the demand will increase.

[BackInATL2011]

Most of buckhead prices I would imagine gave already recovered to before recession prices, at least the smaller condos have, though im not a realtor. The reason I say that is because buckhead is arguably the most upscale area of atlanta metro. What worries me is that a condo of that price may be in really bad condition, has something else wrong within the complex like really bad tenants that make living there unbearable, a significant amount of foreclosures still, or the dues are set to increase in the near future that would not be public knowledge until speaking to a realtor. Some are also stagnant with their price appreciation because the complex is not FHA approved due to lack of financial strenght for the HOA which really limits the potential buyers. And also keep in mind some condos have restrictions and limitations for rental units. Some of my condo neighbors have been waiting five years on the waiting list to rent out their condo since theres a max on the percentage allowed in the complex available to be rented to promote owner occupied residents.

But if theres nothing wrong with the place and can be rented out immediately then yeah Buckhead should be a safe bet for sure along with midtown but probably most condos are more expensive than 70k and or would be in a fast bidding war with buyers who are here in atlanta personally seeing the property and submitting offers in person, and with cash. When my wife and I bought our shortsale condo in Poncey Highland last year there were 3 offers on the first day it was officially available. Luckily we were first.

Have you researched the beltline yet? If I were you id search in the areas that are within the beltline project which should help with tenant marketability and price appreciation of the cheaper condos on the market right now. Atlanta BeltLine // Connecting Atlanta's rich history to a vibrant future.

I also would not be afraid at all about investing in downtown atlanta because of the growth and projects aimed at downtown especially with GSUs growth recently. Look at castleberry hill too but not sure how many in ur price range. West midtown is also a good bet yet that area was mainly industrial so not sure how many available older investments properties would be available.

If you were trying to find something other than a 1 bedroom. Like a 2 or 3 bedroom condo or a single family home I would tell you to look at the grant park area or any area in the maynard jackson highschool cluster since this is the newest highschool to get a lot of attention and efforts to fix up from the less tham average school its always been. But again, one bedrolms there may already be out of price range. I would say you'll be okay if you team up with a realtor that you trust and knows the area really well. Good luck!

[nyc2020]

GSU sounds like a good area. i'm looking for specifically for condos for the low maintenance. a rental in a collegetown would be rather ideal... thanks.

[lastminutemom]

As a current landlord, you are probably aware of rental caps that exist in most buildings. My gut would tell me that at that price point, the building has most likely hit the cap and you won't be allowed to rent it out. You will be placed on a list and have to wait until units convert from rentals to owner.

In terms of Buckhead, I wouldn't be sure that you would see great appreciation.

Downtown or the Beltline may be better investments -- but you could easily run into the same cap issues. (Older buildings sometimes don't have this cap, but keep in mind that in some cases, these buildings really are just apartment buildings with lots of owners. You won't see much appreciation in buildings like these.)

[George Chong]

Originally Posted by lastminutemom

As a current landlord, you are probably aware of rental caps that exist in most buildings. My gut would tell me that at that price point, the building has most likely hit the cap and you won't be allowed to rent it out. You will be placed on a list and have to wait until units convert from rentals to owner.

This ^^^^^

If there were such deals still available - my life working with an investor would have been much easier!

[nyc2020]

well, they track owner occupancy %s here but that only affects one's ability to get financing for it. so it sounds like you're saying the condo would not let you rent it out even if you already own the unit?

[George Chong]

Originally Posted by nyc2020

well, they track owner occupancy %s here but that only affects one's ability to get financing for it. so it sounds like you're saying the condo would not let you rent it out even if you already own the unit?

That is correct - most HOA's have limits on what percentage of units may be leased at. They can deny you a rental permit and slap you with fines for leasing out your unit without permission. Each HOA is different so read the condo docs before purchasing.

[ehoez]

and HOV fees can change at anytime.

if a building has low occupancy, they will raise the fees.

a $200mo hoa fee, can become $600+ mo easily.

[lastminutemom]

Originally Posted by nyc2020

well, they track owner occupancy %s here but that only affects one's ability to get financing for it. so it sounds like you're saying the condo would not let you rent it out even if you already own the unit?

Yes. And it happens regularly. My brother in law owned a unit that he could never rent out - - finally sold it at a lost several years ago.