Real Estate Investor Magazine South Africa Real Estate Investor Magazine - June 2017 | Page 57

2017, particularly in the renter category. Preliminary
figures are bearing this out—and that’s good news for
both fix-and-flippers and investors whose strategy is to
buy-hold-and-rent.
Research from ATTOM Data Solutions, parent
company of leading U.S. housing data provider,
RealtyTrac, indicates solid returns on single-family
rental investments—particularly in the Southeast,
Rust Belt and Midwest—throughout the rest of 2017.
A particularly bright spot is the state of Georgia,
where the economy has outperformed even the U.S. as
a whole. Nearly 99,000 jobs were created in Georgia
in 2016, according to State Economist, Kenneth
Heaghney, in a recent story in the Atlanta Business
Chronicle. GDP is predicted to accelerate, growing
by 3.2 percent in 2017 and surpassing the nation’s
GDP—which HomeUnion says will expand at its
fastest pace since 2015.
Businesses on the move leading to
increased housing demand
Major metro areas like Atlanta are leading the way,
driven by a healthy, diverse industry base; growing
population; and favorable climate. A number of major
businesses have relocated to the area or expanded their
existing operations, while Hartsfield-Jackson Atlanta
International Airport is a hub for transportation
around the globe. Generous business development
incentives and tax structures should keep the trend on
course for the foreseeable future.
Where the jobs are growing, people will follow—
especially when the climate is generally mild and
amenities plentiful—as they are in Georgia’s major
urban areas. The surging population needs housing,
and while new construction has shown a nice
recovery—particularly in multi-family units—supply
hasn’t kept up with demand. The growth in new-
builds is slowing somewhat, in response to a rise in
materials cost, uncertainty over lumber supplies, and
difficulty refilling once-dormant construction jobs
with appropriately experienced crews. That has meant
a tightening inventory of appealing rentals, along with
the resulting higher rents and returns.
Ranking list. Those are the MSAs that “provide a
strong balance of supply/demand fundamentals while
offering favorable entry prices and limited threats,”
according to the report. HomeUnion calls Atlanta a
“strong market for yield-seeking buyers.”
Partner well for favourable outcomes
Of course, that’s not to say you can simply throw
darts at a map of the state and expect the profits
to roll in. Some parts of Georgia—and particular
locations within the state—are growing well, while
others continue to struggle. As with any investment
not on your home turf, it’s important you partner with
someone who has “boots on the ground” and who has
keen local-market insight.
Due diligence in evaluating deals is mandatory to
make sure that, not only the numbers pencil out, but
also that other factors—schools, crime rates, curb
appeal—translate to buyer and renter interest.
There’s no better time to take a look at the potential
high yields that U.S. markets like Atlanta offer. The
bandwagon I mentioned earlier is, eventually, destined
for deceleration. In fact, HomeUnion says 2017 will
most likely be the last year for strong rent gains in the
SFR market this cycle, just as 2016 was the last year
for above-average rent gains in the apartment sector.
Climb aboard while you still can.
Top performing counties in real estate
RJ Palano is a turnkey operator in Atlanta, Georgia, an author
ATTOM Data Solutions’ Q1 2017 Single Family
and marketer and is an invited speaker for the Information
Rental Market Report ranked Clayton County,
Management Network (IMN) Conferences for hedge funds
Georgia, in the Atlanta metro area, at the top of its list
and family offices. His new books, The Buy Sell Machine will
of U.S. counties with the highest annual gross rental
be released in the 3rd Quarter of 2017 and No BS Retirement
yield, at 23.7 percent. In addition, the report ranked
Account Investing in the 4th Quarter.
another Georgia location—Richmond County, in
RESOURCES
the Augusta metro area—as one of the top five U.S.
counties for potential growth in SFR-returns.
BuyCashFlowProperties.com, Association of Foreign
According to HomeUnion’s report, Atlanta sits
Investors in Real Estate, HomeUnion, ATTOM Data Solutions,
right at the top of its Single-Family Opportunity
Wall Street Journal, AFIRE, Atlanta Business Chronicle
www.reimag.co.za
JUNE 2017 SA Real Estate Investor
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