Real Estate Investment Opportunities for You in Atlanta, GA

HOME Luxury Real Estate November 15, 2023

Forecasted to be the top housing market for 2023 by the National Association of REALTORS®, the Atlanta, Georgia real estate market is indeed enjoying a steady stream of activity that makes it one of the most stable in the country. Atlanta is expected to continue as a booming region for home sales in the next few years, as consumer demand stays high, home values continue to rise, and several future developments are in the pipeline.
Those who intend to invest in residential real estate, therefore, will find a lot of promise in this market.

Making the Most of Market Trends

Atlanta, Georgia real estate offers various rewarding opportunities to investors:

  1. The September 2023 median home price in Atlanta was $400,000, which is slightly lower than the national average. This means that people who hope to make a profit through residential real estate do not need as much capital outlay to buy a home in the city, compared to other metropolitan areas in the U.S.
  2. Most homes have a 98% sale-to-list price ratio, which gives some room for negotiation. Buyers have to act fast in putting in an offer as some of the more desirable properties receive multiple offers. On the other hand, sellers of houses that have been sitting on the market for longer than an average of 29 days might be persuaded to offer concessions for more discounts.

  3. Atlanta has enjoyed positive growth in home appreciation over the past three decades. This speaks to the stability and profitability of the region’s real estate market which are major considerations for those who want to buy a home and use it as a long-term investment.

Advantages of Investing in Atlanta’s Housing Market

Investing in real estate in Atlanta, Georgia is a smart move, owing to several factors that go beyond the affordability of its housing market. Some of the most important of these are:

1. Atlanta has a s strong economy

Atlanta topped the National Association of REALTORS® list of the top real estate markets for 2023 because of key factors that point to a strong economy. These include:

    • Job growth
    • Population growth
    • Number of renters who have the ability to purchase a home

Indeed, the city, and metro Atlanta, in particular, has shown remarkable resilience in the wake of COVID-19. Employment in the region, for example, has recovered by 100% since the pandemic.

In 2023, jobs in the private and government sectors in the Atlanta-Sandy Springs-Roswell, GA area increased by over 50,000 since August of 2022. This is a 1.8% local rate increase in job gains, according to the US Bureau of Labor Statistics.

Industries leading the growth in available jobs include education and health services, leisure and hospitality, and financial activities. Local wages and salaries also rose by 4.6%, which is at par with the nationwide average. As a result, consumer spending in Atlanta also increased, making it higher than the national average in areas like housing, transportation, personal insurance, and pensions.

With these numbers, investors know that funneling money into this region will lead to considerable returns.

2. Atlanta’s population is growing fast

As of April 2023, Atlanta’s population also increased by nearly 67,000, bringing its current population to 5.16 million. The city experienced the highest percentage of growth, fueled by the growth of the region’s employment market – which is the fifth highest in the country since the pandemic. 

Businesses that decided to expand or set up shop in the region are encouraging people from all over the country to relocate to Atlanta. People moving to Atlanta come from places like New York, Los Angeles, Washington, DC, San Francisco, and Chicago.

3. Atlanta works to improve infrastructure and revitalize neighborhoods

Finally, Atlanta actively invests in more opportunities for infrastructure development and neighborhood revitalization. Among the projects in the pipeline that will improve the quality of life in the area are the MARTA rail system and the Atlanta Beltline project, which will both enhance accessibility in the city and provide more incentives for investors. 

Additionally, there is a surge in single-family and multi-family housing unit construction to accommodate people moving to Atlanta, with the city issuing nearly 12,000 building permits in the past year.


Investment Opportunities to Explore in Atlanta’s Residential Real Estate

As an investment opportunity, ADUs or accessory dwelling units can expand a home’s square footage and potentially increase the property’s resale value
Ready to look into investing in Atlanta real estate? Here are the best opportunities to explore for the savvy investor.
Since the 4th quarter of 2021, Atlanta has been drawing considerable interest from many real estate investors. In fact, at around the same time, investors purchased almost $3 billion worth of residential real estate in “the New York of the South.” 
Today, the same magnetic pull continues to hold sway over the region, with 65,000 homes in metro Atlanta converted into investor-owned properties. Large investment firms, in particular, have been known to go after cost-effective listings and make offers for them within an hour of going live. 
These statistics underscore the value of these homes among investors. And others who are considering investing in Atlanta real estate and Atlanta, Georgia homes for sale can explore the following investment opportunities:

Opportunity #1: Buying property and leasing it out

Buying one of the available Atlanta, Georgia homes for sale and leasing it out can be a lucrative investment for several reasons:

  1. Atlanta is a renter’s city. According to market data, the ratio of renters to homeowners in the city is 55:45, which offers a significant advantage to landlords. With this many people thinking “Is it better to rent or buy a house?” and opting for the former, there’s a ready market to explore.

  2. Atlanta’s rent is higher than the national average, at a little over $1,800. Bigger properties can even net up to $2,500 per month in rent. As such, leasing a piece of residential real estate in the city can be a rewarding source of passive income. 
The best neighborhoods for renters in the city include: 

  1. Midtown. Located within walking distance of Piedmont Park, Midtown is an urban enclave with a plethora of high-rise residential and commercial buildings. Rent in this area ranges between $1,700 and $2,700.

  2. Buckhead. Buckhead is the go-to destination for anyone looking for high-end stores and the best dining. It’s also extremely popular among young professionals. Rent here can go beyond $2,000.

  3. Downtown. A neighborhood that has gained popularity in recent years, downtown Atlanta hosts most of the tourist attractions in the city. Rent around Downtown is typically the same as Buckhead.
There are also various ways to lease property: as short-term rentals, as vacation rentals, or as long-term rentals.

Opportunity #2: Buying and flipping

Also called fix-and-flip, buying and flipping involves purchasing a run-down or distressed property, fixing it to become market-ready, and then selling it for a profit. In 2022, flipped single-family homes and condos accounted for around 8% of all home sales in the United States – which translates to over 400,000 properties.

As an investment opportunity, flipping typically generates a return on investment of over 26% and gross profits of almost $68,000, on average. In 2023, however, flipping profits saw a decrease in percentage, due to the rise in home prices and mortgage rates.

However, the situation is a bit different in Atlanta. Investors who wish to purchase one of the low-cost Atlanta, Georgia homes for sale and later flip it have the advantage of paying lower prices to buy a house. This is because the average cost of homes in the city is around $400,000 which is lower than the national median price of around $422,000.

Additionally, real estate in Atlanta is known to be one of the best long-term investments in the US for reasons already mentioned, including population growth, economic diversity, affordable housing, low unemployment, infrastructure development, quality of life, as well as landlord-friendly regulations

This is why Atlanta is among the most active markets when it comes to flipped properties. As of the first quarter of this year, over 15% of home sales in the city were home flips–the second highest in the country. 

When choosing where to buy property for flipping, investors should consider the 70% rule. This states that the purchase price for a home must not exceed 70% of its After Repair Value; this amount should also not include the potential rehabilitation costs.

If an investor wishes to sell a house for $500,000, for example, and they expect to pay around $50,000 to fix the house, they should look for homes that sell at around $320,000 or below to turn a significant profit.

Short-term cash flow from renters or long-term capital gain when home values appreciate? 

Opportunity #3: Buying, keeping, then selling

Another smart strategy to use when investing in Atlanta real estate is to buy, keep, and sell. Also known as buy, hold, and sell, this specific investment option accords investors a two-pronged profit approach through:

  • Short-term, consistent cash flow by leasing the property out to renters
  • Long-term capital gain by selling the home after years of steady home appreciation
Atlanta, which has seen tremendous growth in immigration over the years, is a prime candidate for this real estate investment strategy as it has a large number of people deciding between “Is it better to rent or buy a house?” and opting to do the former.

Around 40,000 properties in Georgia are owned by institutional landlords, out of a national portfolio of about 300,000. Many of these people investing in Atlanta, Georgia real estate do so with the specific goal of renting out these properties to in-migrants. 

Similarly, Atlanta has enjoyed a steady appreciation in home value over the past decades. In fact, homes in the city have appreciated at an average annual rate of 3.83% since 2000 for a total appreciation of almost 140%.
The highest appreciating neighborhoods in the city include: 

  • Vine City
  • The Villages at Castleberry Hill
  • Hunter Hills
  • Vine City East
  • Ashview Heights/Just Us
  • West Lake
  • Dixie Hills/Penelope Neighbors
  • Westview
  • Oakland City; and
  • Pittsburgh
When choosing where to buy houses to hold and sell, investors should consider factors like accessibility to amenities, proximity to good schools, low crime rates, and diversity of population (families, young professionals, and retirees). 
These hold-and-sell factors ensure that:

  1. People will want to live on the property
  2. Home value will appreciate over the years due to the demand
  3. Economic growth founded on active market dynamics between various sectors will allow the area to develop further in the future
As far as these factors are concerned, these are the best neighborhoods in Atlanta that investors might want to invest in:

  • Peachtree Heights East
  • Buckhead
  • Peachtree Battle Alliance
  • Memorial Park
  • Sherwood Forest
  • Woodfield
  • Arden/Habersham
  • Collier Hills; and
  • Wyngate

Opportunity #4: Buying property and adding an ADU

Building an Accessory Dwelling Unit or ADU on a property is another strategy to consider for those who want to profit from investing in Atlanta, Georgia real estate.

An ADU, according to Atlanta’s definition, is a small and secondary residential unit located beside or within a primary dwelling unit, all within the same property. It can be attached to the primary home or exist as a detached, standalone unit.

According to Freddie Mac, the number of these alternative living spaces has reached about 1.4 million units in the US. Notably, Georgia is among the top four states that have the most ADUs in the country. The other three are California, Florida, and Texas. 

As an investment, ADUs are a cost-effective option because:

  • They do not require a separate mortgage.
  •  It can expand a home’s square footage, which might also increase its resale value. In fact, current market data says that such a unit can up to $600,000 to a home’s resale value. 
Investors looking to turn a profit through an ADU will find that Atlanta might make it easier for them to do so, in the future. An ordinance is presently in the works to ease legislation around ADUs and use them to meet the city’s housing shortage. 

Proposed improvements include: 

  • Allowing one ADU per property in certain districts
  • Increasing the size of attached ADUs to 50% of the size of the main unit
  • Allowing detached ADUs to reach up to 1,000 square feet in size
  • Constructing ADUs four feet from rear and side yard property lines in certain Atlanta districts

Opportunity #5: Investing in a residential REIT

Finally, investors may consider investing in a residential REIT or real estate investment trust

REITs are passive investment vehicles made up of contributions from different investors; residential REITs typically manage multifamily rentals such as apartment buildings and condominiums.
Investors can make money:

  1. Dividends are regularly awarded according to a set payment schedule. The exact profit depends on the performance of the REIT, but federal law mandates that REITs pay investors 90% of their taxable income. 
  2. Holding onto the REIT and selling it after it has increased in value.
The advantages of investing in a residential REIT are:

  1. The lower capital outlay it requires is particularly helpful for those who may not have enough funds to purchase their own property
  2. Avoiding the complexities associated with managing rental properties
  3. Diversifying investment portfolios or reinforcing them

Special Considerations When Investing in Atlanta

When investing in real estate in Atlanta, there are various regulations to keep in mind to ensure that the investment is protected and secured.

  1. Those who are looking to purchase a property and turn it into a short-term or vacation rental must first secure a short-term rental license. Additionally, they must: 

    • Be a resident of Atlanta
    • Not own more than two short-term rental units, one of which must be a primary property
    • Pay an annual fee of $150 and a hotel-motel tax of 8%
    • Comply with noise and party regulations

  2. Investors looking to add ADUs can also do so only within certain regions, specifically R-5, R-4, and R-4A zoned lots. 

    • There cannot be more than two units on the same property, including the ADU
    • Accessory units must not go beyond 750 square feet in size, nor can they be sold separately from the main property
    • Accessory units must adhere to lot coverage requirements, such as 25% rear yard coverage, 55% lot coverage, and 50% FAR (or 65% for lots smaller than 7,500 SF)

  3. Residential REIT investors must first open a brokerage account. Subsequently, this entails working with the right professional to ensure that the process follows regulatory and legal stipulations.

Make Smart Investments With Home Luxury Real Estate

Partnering with trusted professionals who have specialized knowledge in guiding investors is important to ensuring the profitability of an investment. 
To that end, HOME Luxury Real Estate offers local expertise founded on $400 million worth of sales in their first year alone. This feat ensures that the team can provide valuable assistance to investors as they navigate the process of investing in Atlanta’s residential real estate.

The team has access to the best properties for sale in the area, so investors can look through an inventory that promises high yield. Many of these properties are in desirable locations, which makes them prime rental units or long-term capital assets.

Additionally, HOME Luxury Real Estate works with their client’s best interests in mind. In this way, a budding investor is assured of receiving helpful advice in not only looking for the best properties in Atlanta, but also in closing the sale, complying with the technicalities of the transaction, and adhering to regulations that govern residential real estate investments in the city.

Work With Mary Stuart

Mary Stuart Iverson is a member of Who’s Who In Luxury Real Estate /, an international network of real estate professionals operating in 195 countries and representing the finest residential luxury estates and property brokerages in the world.