Why Pick Atlanta?

Since I began investing in the Atlanta market I have been asked many times why I picked Atlanta. Some of the reasons are analytically based, and some just work for me. I live in South Florida, and having lived through the aftermath of hurricane Andrew in 1992 I decided that even though Florida is where I live, I simply wasn’t ready to risk the major part of my livelihood to the whims of the weather. Of course every location has its own unique natural risks ranging from earthquakes to ice storms to tornados but I am just particularly hurricane phobic. There is also the added benefit of proximity, I can drive to Atlanta, or even fly there within 90 minutes so it’s not that far away if I need to take care of emergencies.

I began by reviewing general statistics for the area such as median housing cost and median incomes. The average family in California buys a home that is worth six times their household income. Compare this to the cost of a home for the average family in Atlanta which is about two times their annual income. Housing in Atlanta is more affordable, giving me a much larger buyer pool and lower home prices. The average monthly rent for a three bedroom two bathroom home is in the $750 to $1000 range, yet the lower cost of purchasing the home means that the financing does not preclude renting as a solid exit strategy. Even if you plan to flip the house or remodel and resell you still have the viable option of renting as a solid backup.

This is not the case in many locations where housing prices are extraordinarily high and property taxes and insurances simply price the rent out of the market on a financed property. I recently had a huge jump in my personal homeowners insurance. The premium for 2009 in Miami was in the range of $6000, yet the insurance I purchase for my rentals in Atlanta comes in at around $450 annually. While most of the country recently saw the huge increase in housing prices, followed by a huge free-fall Atlanta by comparison has been more stable (although if you asked a local, they might not agree it’s all based on perspective).

Other factors are also important such as excellent growth rates, unemployment rates, and the other long term trends that make an area such as Atlanta desirable for investment.