Many investors have been taking advantage of the real estate crash that occurred several years ago, but opportunities for profits are still available in many parts of the United States.
Properties for sale in the USA remain strong investments during this period of economic and market recovery, but some cities are better for investors than others are. One of the top cities in the U.S. for investors is Atlanta, Georgia.
An explosion in new construction took place there just before the housing bubble burst, and it left the city with an excess inventory of residential property.
In addition, prices are still very low, making them affordable for even entry-level investors.
In a recent article published by Fortune Magazine, the top cities in the U.S. for investors were ranked based on several factors, including a study conducted by Deutsche Bank.
Following are 10 reasons why Atlanta is the number one city to buy properties for sale in the USA.
1. Atlanta benefits from high rental returns. Rental returns in Atlanta are more than 50 percent higher than the average mortgage payment for a single-family home. The exact amount of rental prices in comparison to mortgage payments is 151.2 percent. This situation is expected to continue indefinitely into the future, and it makes Atlanta property very attractive because rental income is so important while waiting for capital growth.
2. Older homes are just as affordable as new homes in Atlanta. Atlanta has a large number of older homes built in the first quarter of the 20th century, and these properties are in high demand. However, even though demand is high, prices remain low because there are so many of them currently on the market. Affordable homes that are sturdily built of rich hardwoods can be found for around $100,000, and in some cases homes with as many as five bedrooms and four bathrooms can be purchased for less than $200,000.
3. Home prices fell by 33.2 percent from 2006 to 2010. Falling home prices are not usually considered good for property investors, but the decreases in Atlanta ended four years ago. During the recession, property values fell so low that they had nowhere else to go but up. Fortunately, the climb has been slow and steady, allowing ample opportunities for investors to enter the market.
4. The population of Atlanta is growing quickly. The population of Atlanta is expected to increase by 43 percent from now to 2025. This is an enormous increase for less than 11 years, and it makes it one of the fastest growing metropolitan areas in the country. As the population grows, home prices will rise. The rise in home values may be tempered by new construction, but this will create further prospects for investors.
5. Atlanta is a popular center for corporate businesses. Atlanta is home to a multitude of corporate headquarters, and it is this popularity that is contributing to its rapid population growth. Some of the largest corporations in the world are headquartered here, including Coca Cola, Delta Airlines and United Parcel Service. Only three other cities in the country have more corporate headquarters than Atlanta: New York, Dallas and Houston.
6. The city has a high number of colleges and universities. More than 30 institutions of higher learning are located in Atlanta, which creates a positive climate for rental homes. Students are rarely supported by university housing, and they seek homes in the private sector.
7. Atlanta has very low interest rates. Interest rates on mortgages for Atlanta property have historically been very low. In 2012, rates were lower than 4 percent. With such low rates, investors can maximize their cash flow with low monthly payments or pay off the property in full very quickly.
8. Real estate in Atlanta is a low-risk investment. Although many people argue whether the stock market or real estate is the better investment, in Atlanta the answer is obvious. An investment portfolio that includes Atlanta real estate lowers the risk of losses. While the stock market has declined by 14.2 percent since 2000, real estate in Atlanta has increased by 19.2 percent.
9. Atlanta real estate is set for high capital growth. Appreciation in the value of homes in Atlanta has risen by an average of 5 percent per year over the past 40 years.
10. Atlanta has a low cost of living. The cost of living in Atlanta is very low for a major metropolitan area, which is helpful in attracting new residents. Currently, Atlanta is ranked fourth in the U.S. for housing affordability and cost of living.
Author: Simon Worthington
Simon is the International Sales and Marketing Manager at Ray White Surfers Paradise, Gold Coast, Queensland, Australia and Ray White USA, Atlanta, Georgia.