The smartest real estate investors stay ahead of the curve, always searching for the next great market.
Atlanta happens to be one of those markets. The Peach State’s capital is one of America’s fastest-growing metros, thanks to its strong economic growth, great weather, and excellent geographic location.
This article will cover the benefits of owning Atlanta rental property in more detail to help investors determine if “ATL” is right for their portfolio.
One of the largest reasons so many get into real estate is the opportunity for a steady income source.
Atlanta in particular can be a good market for this since rents are fairly high and trending upwards. The earlier an investor enters, the more potential rental income growth they could enjoy.
Once a rental investor repairs or improves a property, the amount of effort involved decreases. That makes the income more passive.
Investors may outsource ongoing work, like maintenance and marketing, to property management firms. This lets investors remove themselves from property management, making their income truly passive.
Putting all your investment capital into one asset class — like stocks — may be detrimental if that asset class declines.
Real estate allows investors to diversify their overall assets. Real estate could potentially hold value or appreciate while other asset classes fall.
This helps investors weather economic storms, minimize risk, and earn steady income.
Owning rental property in Atlanta could offer substantial tax savings for eligible investors. It’s smart to consult a tax advisor to ensure you’re deducting the correct amount and complying with all tax laws.
That said, here are a few of the top deductions to look at:
The widely-known mortgage interest deduction is not available for investment properties. However, real estate investors can still deduct mortgage interest as a business expense.
This difference is important because, in most cases, you can only deduct mortgage interest up to your rental income.
Depreciation can be a substantial tax deduction for many investors. It lets you deduct wear and tear over time instead of taking one large deduction after purchasing.
Investors may be able to add costs associated with obtaining the mortgage, like appraisal fees and title insurance to their property’s cost basis. This could potentially offer more depreciation deductions.
Real estate investors may be able to deduct property-related operating expenses. They must be “ordinary and necessary” to be deductible, per the IRS.
Some potentially deductible expenses include:
Property taxes and insurance needed for the property may be tax-deductible. These can offer recurring tax savings since you must pay them regularly.
Investors may be able to deduct travel expenses involved in collecting rent or maintaining property.
This can especially benefit out-of-state investors because they may rack up more travel expenses.
Economic growth draws workers to a market and helps residents earn higher incomes. This flows to rental investors, who enjoy potential property appreciation and higher rents.
Metro Atlanta’s population is growing thanks to its diverse and robust economy. It is quickly becoming a hot city for tech, drawing scrappy entrepreneurs and high-earning workers alike.
That said, many industries are big in Atlanta. Per BLS data, Atlanta offers plenty of jobs in manufacturing, the trades, healthcare, government, and hospitality, among other sectors.
It’s easy to see why — many of the world’s largest corporations have headquarters or major offices in the metro area. Some of these include:
Atlanta is also home to educational institutions like Emory University, Georgia Tech, and Georgia State. These schools offer employment, and their graduates help fuel the Atlanta economy.
Qualitative factors like location and geography can significantly influence a real estate market.
Atlanta is surrounded by the great outdoors. For example, the Chattahoochee-Oconee National Forests lie to the north. They’re perfect for hiking and biking and offer historic sites for visitors to check out.
Within this forest is Georgia’s share of the beautiful Blue Ridge Mountains. Scenic views and outdoor activities await residents and visitors here. In fact, Atlanta itself is in the Appalachian foothills, so you need not venture far to get a taste of the mountains.
Closer to Atlanta, tons of parks dot the outer reaches of the metro area. Lake Lanier lies northeast of the city, while the Atlantic Ocean is 3.5 hours southeast. Chattanooga, TN; Greenville, SC; and Columbia, SC are all a few hours away by car.
Atlanta’s weather is fantastic. Summers get fairly hot, but as mentioned, the lake and ocean aren’t that far away. Meanwhile, winters are mild.
According to Axios, the Atlanta Metro Area became a “hotbed for real estate investors” in 2022. Prices and rents are increasing, but great deals are still available.
In fact, Atlanta’s housing market began swinging towards buyers in the middle of 2022. This could allow buyers to score an excellent cost basis and improve the property before renting it out.
Owning real estate in any market offers investors steady income, investment diversification, and potential tax deductions.
However, Atlanta’s rapid population growth and rising rents — powered by a strong economy and excellent geographic location — offer investors some of the best opportunities in the nation.
Prices are rising, but there are still deals to be had if investors know where to look. Investors that move fast can lock in the best cost basis.
That’s where Evernest can help. We can assist you in finding the best deals to maximize your potential returns in the Atlanta real estate market.
Let’s talk — fill out our buyer’s form today to get started.
Taylor Streitmatter is Evernest’s Director of Brokerage. His diverse expertise includes sales, operations, and brokerage management.
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