Jason Hartman, creator of the , creator of the Complete Solution for Real Estate Investors™, advises real estate investors nationwide to consider Atlanta as a budding area for income producing real estate. Atlanta represents an investment gem in the southeastern United States. The area has spectacular economics from a development and employment perspective that make it a tremendous opportunity for income property investors.
With a wide diversity of employers, many universities and a vibrant cultural presence in the city, Atlanta has attracted a tremendous amount of migration from young professionals seeking employment opportunities. Since many of these young professionals choose to rent, the Atlanta market has very healthy rents relative to values.
Atlanta’s experience during the real estate bubble and financial crisis has been somewhat unique. Prices in Atlanta started from a much lower baseline than many other major markets. The prices escalated to a peak in advance of the financial crisis and have subsequently fallen back to the same levels that they were 10 years ago.
“Most of the markets that experienced an inflation and deflation of prices like this are bubble markets that typically exhibit high prices relative to rents,” said Jason Hartman, founder of Empowered Investor Network and host of The Creating Wealth Radio Show. “Atlanta is a more linear market with attractive rates of return available from cash flows that result from rent revenues. This is one of the primary reasons for Atlanta’s strength as an income property investing market.”
The favorable business and economic environment in Atlanta make it one of the more likely places for an economic recovery to emerge. Hartman’s prediction models estimate a return to modest rates of appreciation in 2011—which combines with attractive rates of cash flow to produce a tremendous opportunity for astute investors. By purchasing in Atlanta, it places investors in an advantageous situation where one can afford to wait out market volatility and sell when it is optimal for an investor’s long-term strategy.
According RealtyTrac, Georgia is ranked 5th in highest foreclosure totals since the beginning of 2011 with 60,870. The number of foreclosure filings is now up to 78,046 with an average foreclosure sales price of $129,308. Home values in the Atlanta area are sitting at the lowest levels since the end of 1999, according to the Standard & Poor’s/Case-Shiller Home Price Index released in April.
Forecast Methodology
The ROI predictions for each individual market are based on three fundamental components as income property is a multi-dimensional asset
class. The first is component appreciation, which is based on a composite of forecasts from CNN Money, Fortune and Hartman’s Regression to Replacement Cost™ methodology. The second impact is leverage. The reason why Jason Hartman’s methodology separates appreciation from leverage is to pinpoint how much value is coming from the asset itself and how much is coming from the impact of leveraged financing to purchase the asset. The final component of our ROI predictions is cash flow.
Hartman’s model is the only place in the market where a full ROI build is conducted. Most forecast reports begin and end their analysis with value appreciation. However, we understand the full dynamics of return on investment and have chosen to build and report a complete ROI for each of the targeted market areas.