Q: Should I buy a house that’s in foreclosure?
First, the good news for anyone bent on purchasing a home at auction: Georgia has a nonjudicial foreclosure process, which means all foreclosed homes are simply advertised in the newspaper and then offered for sale. In the past, homebuyers with cash (banks typically want to close within 30 days, which may not be enough time for winning bidders to secure financing) could save 10 to 20 percent off the price of a nonforeclosed home. These days, though, foreclosures in Atlanta’s resurgent economy are scarce, says Rick Hale of the Heart of Atlanta Group at Keller Williams. Distressed properties (foreclosures and short sales) represent less than 2 percent of homes in most zip codes, down from as many as 50 percent during the recession. Even if you find a foreclosure ITP, the bank is going to get its money out of the deal. The market’s so hot that there are sometimes even multiple offers.
Q: I see so many townhomes for sale. Are they a good investment?
A jump in property values and land prices has boosted the popularity of townhomes across metro Atlanta. But the semidetached lifestyle isn’t for everyone. Mary Anne Walser, of Keller Williams Buckhead, offers few points to consider:
- Townhomes can feel—and be—more secure than single-family houses. And the close proximity of neighbors can add some peace of mind.
- Still, for some, that may be too close for comfort. Shared walls mean more opportunity for disruption.
- There’s less maintenance. But fee-simple ownership typically means you’re responsible for keeping up the roof and exterior.
- No matter the upgrades, if your neighbor doesn’t maintain their unit, it can bring down your resale—even more so than a rundown single-family home next door would.
Q: What should I know before trying to flip a house?
Everybody watches the HGTV shows, and they make it look so easy, says Caroline Haynie Harris, an agent at eXp Realty and an experienced flipper. But it’s important to educate yourself before trying to invest. For example, getting a real estate license isn’t necessary, but if you have one, you’re able to work directly with listing agents and present your own offers. It just cuts out the middleman. And that’s useful because these days just finding the property in the first place is your biggest hurdle. As a general rule of thumb, you don’t want to pay more than 70 percent of whatever the repaired value is going to be, minus the repairs. Part of the education is also learning who to hire—architects, contractors—and what you need. Remember, nothing ever goes as planned. Have a cushion in your budget.
Q: Why is it so hard to find an affordable rental intown?
Prices inside the Perimeter are significantly higher than in other parts of the metro area—during the third quarter of 2015, the average rent was $1,658 per month intown, compared with $1,043 in all of metro Atlanta—in large part because there are fewer available options there, says Lee Taylor of Keller Williams Realty. What’s driving the scarcity of units? An increasing number of would-be renters for one, thanks to job growth coupled with an influx of empty nesters, millennials (who make up roughly half of Midtown’s entire population), and other Atlantans who traditionally would have owned but are unable to secure a mortgage or have been scared away from buying.
Still, a reprieve could be on the horizon. In the third quarter of 2015, 40 intown apartment communities were under construction, and another 41 were proposed. So at some point soon, supply and demand may favor the leasee again.
This article originally appeared in our March 2016 issue.