We typically like to talk about investing in commercial real estate assets in the Atlanta area but we also have quality income producing residential real estate assets such as the Epic Gardens Apartments. Residential properties, which include single-family homes, multi-family homes, and residential apartment buildings, can be very sound and very profitable investments to add to your real estate portfolio. Investing in residential real estate helps us diversify our portfolio, grow our asset base, and invest our cash.
Income producing residential properties can produce:
• Good Cash Flow
• Asset Appreciation
• Equity Growth
Smaller residential properties such as single-family homes tend to be less expensive than commercial real estate properties, which makes them an attractive starting point for new real estate investors. New investors can often use leverage (a mortgage) to buy a rental property and build their net worth while also creating positive cash flow. However, leverage can be risky so always be sure to understand your investment before buying a property. Here are some tips to help you understand a little bit more about investing in income producing residential properties.
Determine Your Type of Investment
What kind of incoming producing residential property are you looking for? Are you looking to invest in a single-family home, a multi-family unit, or an apartment complex? Factors that will influence your decision include; how much capital you are willing to invest, your tolerance to risk, and your decision to manage the property yourself or hire a company with property management services such as EpiCity.
A single-family rental home typically requires a smaller initial investment and can be managed more easily on your own. The disadvantages of smaller residential properties are that cash flow (and more specifically revenue) tends to be lower and there is no diversification of tenants. This means that your profits will be smaller and a vacancy has larger relative repercussions. Multi-family homes and apartments carry a higher initial investment, larger maintenance costs, and typically require professional management expertise. However profits tend to be higher and cash flow is more stable.
Find Your Comfort Zone
Where you invest your money geographically in Atlanta can yield drastically different results. Like any major city, Atlanta residential real estate prices vary between neighborhood and the distance from downtown. Typically you can divide a city into the downtown area and then several rings around it. Each area offers different benefits and levels of risk. While you can never depend on asset appreciation, you can look at historical data for an area and see how it has performed in terms of rent and sale price. For example, typically in a booming economy the suburban rings see higher yields than properties closer to downtown. However, in the case of a struggling economy suburban properties can depreciate significantly, may have higher vacancy rates, and may get lower rents. Thus, they carry greater risk compared to urban properties that generally see more consistent returns.
There are no guarantees when investing in income producing residential properties but with some quality research and sound decision-making, you can start profiting from real estate. If you prefer not to go it alone and would like to invest with the help of experienced real estate professionals, please contact us at EpiCity Real Estate Services to learn about our residential real estate investment opportunities. Working with EpiCity is a great way to invest your money in Atlanta real estate. Leave the work to us and enjoy the returns. Contact us to learn more.