Rentals in 30068>Question Details

Justin B, Home Buyer in Marietta, GA

Please help to determine lease rate for the house in East Cobb (30068)

Asked by Justin B, Marietta, GA Tue Jul 23, 2013

Please help me to determine lease rate for the house in East Cobb (30068). I am considering buying a rental property, but I think it may not bring enough rental income to cover all expenses; I would break even at best.
House is located 1 mile east from Johnsons Ferry Rd. and Lower Roswell Rd. Walton, Dickerson and Sope Creek schools, 4 bed. 2.5 bath, traditional 4 side brick built in 1970s, corner lot located next to the power lines, home is in very good shape (ready to move in) but it hasn’t been renovated since 70s, may need minor updates (appliances, carpet, paint), 2,200 square feet with 2 car garage.
I was told that I could get $1,200 to $1,500 per month for it, but even upper range of that would only break even. From what I described, do any of you think I could get $1,600 to $1,800?
Thanks for your input.

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Homes in Sope Creek/Dickerson/Walton are in very short supply. I recently viewed the entire inventory with an overseas renter looking for a 3 year lease. It would be unusual to get less than $1500 for a property such as you have described. This is an area where you are paying an extreme premium price, so it is expected that your cash on cash returns will be lower. If you want high cash returns East Cobb is not your market, investor returns are disproportionally in appreciation over cash flow.

It is difficult for you as an owner to attract the most attractive tenants, those relocating from overseas, those relocating from other cities to Atlanta for work, those working with the agent that just sold their home and need something in 2 weeks. All these propsects work with agents that utilize the Multiple Listing Service to locate properties. Local tenants with no urgency, tenants with poor credit agents refuse to work with are the primarily prospects owners are left with when not represented by a REALTOR. You really need to select a professional REALTOR who does a comprehensive rental survey, perhaps takes you to see some of your competition, and has a comprehensive marketing program to capture the best tenants and then does a detailed background check once one is found.

That said, the tenants that I work with, willing to pay the premium price to be in the premium location of Sope Creek/Dickerson/Walton do not get excited by a 1970's home. They look at the 70’s kitchen and say, we don’t need to see the rest of the house. They want remodeled baths, new kitchens, stainless steel appliances, brushed nickel lighting, fixtures, drawer pulls, and granite counter tops. The typical tenant for this area are former homeowners. They have higher expectations than life long tenants. They are typically not moving from B/C grade apartments. You can’t be offering B/C rental property. Understand your market if you want investment success.

Bruce Ailion,
RE/MAX Greater Atlanta
An Atlanta Real Estate Expert Serving Clients Since 1979
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2050 Roswell Road
Marietta GA 30062
404-978-2281 Direct
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678-760-6266 Buyer’s Agent Adam
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The Linked In REALTOR
0 votes Thank Flag Link Wed Jul 24, 2013
$1500 would seem to be a reasonable rate for this size house in this area provided home is in good condition and has reasonable upgrades directed toward energy efficiency. What are the monthly heating and cooling bills? In the 70's construction standards called for R-19 insulaion in the attic, for example. Now it is R-30. Windows were single pane and now they are double and triple pane with inert gas bringing insulation values above R-25. Running costs for a house this size can vary as much as $200 to 300 per month more depending on insulation. Since that number is a significant fraction of the lease payment you are looking for, it will make a big difference if the energy efficiency issues from the 70's have been addressed.
0 votes Thank Flag Link Tue Jul 23, 2013
my mistake. There were just a few that started at $1400. The link in my previous answer should take to the list.
0 votes Thank Flag Link Tue Jul 23, 2013
I did a search for 4 bedroom rentals in the Walton district over the last 6 months. There were 77 homes and the very least expensive list price was $1500. I have no idea how your home compares to those but I think $1500+ would seem realistic.
0 votes Thank Flag Link Tue Jul 23, 2013
Hello Bob, on average, how much do power lines impact rental income?
Flag Tue Jul 23, 2013
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