Today I’m analyzing a 3 bedroom Atlanta investment property located in Ellenwood, GA. Ellenwood is a suburb of the Atlanta metro area. Take a look at my analysis of this property and let me know if you agree. You can also send me an email with additional questions or to learn more about this property.
ATLANTA INVESTMENT PROPERTY OVERVIEW
- Market: Metro Atlanta Area
- Listing Price: $95,000
- Rehab Estimate: $6,000
- Address: Shane Ct, Ellenwood, GA
- Beds / Baths / Sq Ft: 3 beds / 2 bath / 1,630 sq ft
- Property Description: A very nice 3/2 Split Level home with an open floor plan with a living room dining combo.Plus an additional Family room with Fire Place…Large Master Bedroom with a private bath..South River runs along the backyard,nice deck…Very spacious,tenant in place.
NEIGHBORHOOD GRADE: C
- Median Income: $56,577
- Poverty Rate: 12%
- Unemployment Rate: 14%
- % with Bachelor’s Degree: 28%
- % of Renters: 18%
The zip code 30294 is average for the Atlanta metro area based on key economic factors including median annual income and the poverty rate.
RENTAL PRICE EXPECTATIONS: $1,125/MO
The vast majority of rental properties in this area are 3 bedrooms. These homes generally rent for $975 – $1,250 per month with a median of $1,150. This investment property is in the range of the average sized home in the area, we have assumed rent of $1,125 per month.
$1,125/mo is very affordable when compared to the area’s median income which is over 50.3x the monthly rent. There should be a large group of area residents who can comfortably afford the proposed price.
ANNUAL EXPENSE EXPECTATIONS: $6,136 (45% OF GROSS RENT)
- Property Taxes: $605
- Insurance: $1,125
- Property Management: $1,969 (assumes 1.75x monthly rent)
- Vacancy: $750
- Maintenance: $1,125
- Other: $563
The expenses for this property are generally in-line with industry standards with the exception of property taxes, which are below the typical 2x rent. Since this is a C-level neighborhood I have assumed 1 month of vacancy every 18 months and ~.5 month of cushion for unexpected expenses.
Property management is set at ~1.75 months rent. This factors in regular monthly management fees along with various other new tenant and lease renewal fees that companies may charge.
|At Listing Price
||At Recommended Price
I have analyzed this Atlanta investment property assuming a financed purchase. With a neighborhood grade of C , I would normally target a minimum annual return of 12% with an additional 3% margin of safety. I think 2% annual appreciation of ~$1,900 is a reasonable expectation. Here the listing price of 95,000 is pretty good. I would start with an offer of $92k, but this property is attractively priced.
Note that this property will also benefit significantly from deducting annual depreciation of $3,535/yr.