Home Buying in Atlanta>Question Details

Gaurav, Home Buyer in Sunnyvale, CA

I am currently living in California but would like to buy a condo near Georgia Tech as an investment. Is this a good time?

Asked by Gaurav, Sunnyvale, CA Thu Sep 1, 2011

I am hoping to buy a 2-3bd condo and then rent it out to some of the college students. I see there is a large number of properties available near Atlantic station with excellent amenities.

Help the community by answering this question:

Answers

23
Rates are good, inventory is available but I'd sooner put the money into something else.

You're an oiut of state investor looking at a city with a significant condo surplus - and that's not including the shaow inventory. The condo market will be saturated for years, including when you try to sell it. In the meantime you'll be paying through the nose every month, be chasing rents, doing repairs and hoping for limited vacancy.

Successful investors are far and few between in this market - and the ones that are solid are in it full time. This is a sucker bet right now for distant owners or part time "investors". Just my two cents from being deep in it around here since '93.

Hank
2 votes Thank Flag Link Thu Sep 1, 2011
Dave Herren - Hank and I want to see the "local paper" that is claiming that condo prices are stabilizing.

Thumbs up to Chuck for a good answer.

Hank - there is no success in the onesy-twosey approach from CA to GA, is there?

I talk to out of state investor candidates often - I talk to my own clients and friends often - about $25000 to $100,000 condos, lofts and townhomes, and every other real estate investment under the sun and I know that the obstacles to success in:

1. Atlantic Station

AND

2. condos

are plentiful and quite obtrusive.

Here's what Atlanta real estate expert Steve Palm recently stated on 7/31 about condos, lofts and townhomes...he doesn't write for a "local paper," but hear him out nonetheless...he writes a monthly letter to the FMLS members and he creates charts and graphs that explain exactly where we are based on recent FMLS data:

"The average sale price in July 2011 for single family attached was $125,161. This is a decline of 11.8% over July 2010 and the 14th consecutive year-to-year monthly decline. Single family attached has experienced a year-to-year decline for average price in 43 out of the last 46 reporting periods."

I wonder if the "local paper" knows about this trend?

I wonder if that "local paper" has seen Steve's FLATLINED graphs for condo, loft and townhome median prices that go back to 1990?

Gaurav - you can buy a decent single family rental house or multiplex within ten minutes of Georgia Tech for prices ranging from $3000 to $300,000. You probably should not buy a condo. With good operations and sound purchasing fundamentals, the CA to GA real estate connection can be very successful.

Is "this" a good time? YES, for many buyers "this time" truly is..."this" could be a good time for you, but starting with "condos" and "Atlantic Station" is a recipe for peril if you are doing "this" as an absentee landlord...
1 vote Thank Flag Link Fri Sep 2, 2011
I’m just curious as I seem to either be the only or one of a very few with an opposing view; can anyone of the “great time – great idea” crowd please run the math for me on this venture? I tend to rely on the numbers first, then the feasibility of the operation second. Clearly the NAR propaganda about "great time to buy" is out there but I'd like to see numbers.

So, broadly speaking, can someone please show me a scenario for success renting one unit and doing it from CA? Don’t forget to include selling the unit and all that’s involved on that side. I'm not being sarcastic, I'm serious.

Hank
1 vote Thank Flag Link Fri Sep 2, 2011
There are some great opportunities in mid town, but rental caps can make it very tough for an investor... out of state investors are not only going to have to worry about rental caps,but also managing from long distance, having their investment depreciate in value due to the glut of condos, numerous short sales and foreclosures depreciating values even further,and condo associations keeping their heads above water with large delinquencies in hoa dues. A house near campus would be the better bet..
1 vote Thank Flag Link Thu Sep 1, 2011
I would agree with Brian, look into a single family house and keep more cash, most condo hoa fees are $250 and up that could be staying in your pocket.
1 vote Thank Flag Link Thu Sep 1, 2011
Yes! In fact I a local paper recently ran a story stating that condo prices had stabilized in mid-town and may even begin to increase soon. Give me a call at 404-425-4945 if I can be of service.
1 vote Thank Flag Link Thu Sep 1, 2011
Do you have a connection to the Area?.....Son or Daughter or Self attending Georgia Tech?

If you have connections in the Area, or you have a really good property management company that you can work with then it is a Great Time to buy.

If you do not have those ties or connections to the area, it is really hard to maintain an investment property when you are on the opposite coast.
0 votes Thank Flag Link Wed Sep 14, 2011
So at the end of the day, all of the "it's a great time" crowd provides nothing tangible in the way of support for the "buy now" recommendations....no math, no support....zippo. Not surprised.

Steve - I agree with just about all of what you said. I'm not against developing real estate assets as PART of an investment portfolio - I am against going in uneducated to the process. We have little to disagree about but it needs to be drilled home that real estate is by it's nature, a singularly unique entity; every deal has to be carefully reviewed.

The idea that agents ill equipped to do this think they can is scary for their clients.

Hank
0 votes Thank Flag Link Sat Sep 10, 2011
Hank, to answer your question or more accurately to respond to your objections, I too always run the numbers first. In addition to being an experienced agent and property manager, I have a finance degree and as such, always run conservative financial analyses (pro-formas) for my clients before recommending an investment in a particular property or properties. This analysis is backed by real data for recent sub-market lease rates, management fees, property taxes, operating expenses such as HOA fees and Condo fees (if and when applicable), repair/maintenance reserves and lease up expenses such as commissions and fees. The bottom line as I see it is that there are plenty of great investment options in metro Atlanta today for those interested in building an income producing property portfolio. I tend to favor detached SF homes myself due to the fact that there are usually the least amount of restrictions on what the buyer/investor can do with their property, but some investors are more comfortable with what they know (ie. condos and town homes). While there are certainly opportunities to invest throughout the state and outside of the Atlanta market, clearly metro Atlanta is the economic engine of the State of Georgia, has the most diverse employment base, and will rebound more quickly from the doldrums of the economic recession and weak housing market than many other markets in the Southeast. I happen to think that investment property near a major university is a great idea, but I agree with you Hank that I would not suggest leasing to undergraduate students. You will more likely get a more responsible, longer term, reliable tenant from Grad Students, Faculty or University employees. Just my two cents.
0 votes Thank Flag Link Sat Sep 3, 2011
hi gaurav, i think you have good idea, since small homes and condos are cheaper in coastal georgia, i am doing same thing here in georgia from last two years, i have now 15 new homes and condos, which i purchased btwn 100 to 130k (use to be 200k),i rented all for btwn 800 to 950 a peace, its good return and will be better when price go back to normal, i have good agent she manage all for 8% comm.also she finds me good deals too,
0 votes Thank Flag Link Fri Sep 2, 2011
That may be true about the condos having all the amenities for that demographic. However, you never know what you can find. It depends on your budget. Im sure I would be able to search the area and find homes that may need rehab but could fit in your budget. Or you might find a great deal with something that is already upgraded. Like i said; all depends on your budget. I would consider other areas besides Atlantic Station as well. There are plenty of people looking to rent all over Atlanta with great areas suited for those purposes. Any questions feel free to contact me.
0 votes Thank Flag Link Fri Sep 2, 2011
Have you been a student or around students? Any experience what they do to homes/condos? Again, I would love to see some tangible math to support this idea of being a successful long distance landlord....

Gaurav do yourself a favor - if you want to be a landlord do it out there where you can get a toe in the water to see how it feels. Doing it here will cost you a leg and probably more; you will ripped off and be unable to do anything.

Oh - here's the latest from the local rag in atlanta - I stress latest because these headlines are commonplace - "Atlanta police are investigating the armed robbery of a Georgia Tech student in a neighborhood just north of campus....The male student was robbed at gunpoint around 11:30 a.m. Wednesday while walking near the intersection of Calhoun and Center streets, in the Home Park neighborhood where numerous other students have been accosted in the past couple of years"

Yeah I know, it's a big city...blah blah blah.

Stay home and try this where you live....if you get it going then look to expand.
0 votes Thank Flag Link Fri Sep 2, 2011
I appreciate the feedback from everyone. I guess my view was askewed by seeing so many condos in Cali. It seems like most people are suggesting that a single family home is the better option. However, my only concern is that the condos seem to have the newest amenities whereas the single family homes might be older and less appealing to the students and young professionals in Midtown.
0 votes Thank Flag Link Fri Sep 2, 2011
Hi Gaurav,

I would stay away from buying a condo as an income property here in Atlanta personally. I say this because Atlanta is not exactly a condo town like say in California, New York, or Philadelphia. People generally like there space here. Wether it is Intown with some yard space or the Atlanta metro area where people love a lot of yard space. The idea of condo living although not new to Atlanta is still a fairly new thing here. Also think about the possible resale. You might have a hard time depending on the numbers for whenever you would like to sell. As an income property I would say look for a home near the campus. You possibly could get more bank for your buck.

Good luck on your choice! Feel free to contact me if you have any questions.

Tyler Willis
Keller Williams Intown Realty
621 North Ave. NE, Suite C-50
Atlanta, GA 30308

Direct #: 678.656.5524
0 votes Thank Flag Link Fri Sep 2, 2011
Guarav,

Now is an excellent time to invest in income producing rental property in the Atlanta metro area and in particular in the area around GA Tech. I agree that this is a great neighborhood for rental property for students and young professionals who work and play in the Midtown area. Midtown is a huge office submarket in Atlanta and there are many major employers located very close by including Turner Broadcasting, Coca Cola and the Universities (GA Tech and GA State) to name a few. There are also a myriad of professional service firms such as law firms and CPA firms in the Midtown area. I agree that you may want to consider single family homes and town homes in addition to condos. It just depends upon what you like and feel will provide you with the best return and exit strategy. Also, many condo association bylaws and covenants restrict the number of rental units in the community, so it may be difficult to find condos that you can purchase now and immediately put on the market for lease. I work with many investor clients (many of whom are out of state and overseas) and also provide property management services. Feel free to call me to discuss this further at your convenience.

Best regards and good luck,

Steve Wohl
Diversified Real Estate Consulting, LLC
Decatur, GA
404-434-3744
0 votes Thank Flag Link Thu Sep 1, 2011
This is a great time for investors. If you need assistance I would love to help.
0 votes Thank Flag Link Thu Sep 1, 2011
Gaurav

This is a great time to purchase. I would suggest you get acquainted with the rules of the HOA. Sometimes they can be sticklers. I have one for sale in Virginia Highlands that is roughly 5-10 minutes from Tech, and many of them are used as rentals and its priced right. Let me know if I can help

Jeff
0 votes Thank Flag Link Thu Sep 1, 2011
Good deals are out there for sure, but have you considered a single family home instead? Lots of good buys in that pocket of town, and you will not have to deal with a condo board to get permission to rent (or if you have a tenant issue). The rental market is very strong here, I think it is a great move, but would be wary of a condo (just my own personal experience as an investor).
Web Reference: http://buy-Atlanta.com
0 votes Thank Flag Link Thu Sep 1, 2011
It is an outstanding time to be a Buyer.

Make sure to check out the financial 'where-with-all' of the HOA of any complex you become interested in...

If we can help, let me know.

Take care.
0 votes Thank Flag Link Thu Sep 1, 2011
Condos are super cheap right now but it may take some time to get either a short sale approved, or get lender approval on an reo property. Check mortgage rates at http://www.current-mortgage-rates.net and compare banks and lenders. Guidelines on condos will vary among banks/lenders so you want to make sure you are qualified to buy if you find something you want to make a move on.
0 votes Thank Flag Link Thu Sep 1, 2011
As far as loan rates and prices, this us a fantastic time. Both are low, and are likely to stay that way for the near future. If you are planning on hanging on to the unit for a few years, this could be a smart investment. The advice about renting from a Previous realtor is sound, most lenders have a rental occupancy cap, and some HOAs do, as well, so you'll need to check this before buying.
0 votes Thank Flag Link Thu Sep 1, 2011
Yes! This is an excellent time to purchase a condo in that area; and, many of the communities have wonderful amenities. For additional information, contact me - otha@therealestatecompany.biz. or Cell 404.578.8483.
0 votes Thank Flag Link Thu Sep 1, 2011
The condo market has some really good values right now - however, most of the better buildings have a lengthy wait-list for rentals. They only allow a certain percentage of the units to be rented at one time. My HOA is saying 2 years before my "turn" will come up. Be sure to check with your realtor on this - it varies by building.
0 votes Thank Flag Link Thu Sep 1, 2011
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer