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 55