Featuring serene neighborhoods, unique shopping centers, top-quality schools, and sprawling green spaces, investing in East Cobb real estate requires in-depth research and strategy. Whether you’re a beginner or a veteran property investor, these four tips on real estate investing can help you navigate the East Cobb property market with ease.
CLARIFY YOUR INVESTMENT GOALS
Buying property as an investment is a different ballgame than buying for personal use. Rather than thinking about your needs, preferences, and lifestyle, you have to approach it as a business venture. There are several costs to consider beyond the purchase, such as property maintenance and management, repairs, upgrades and renovations, utilities, and taxes.
A concrete investment plan can serve as your anchor when navigating the ups and downs of being a property investor or landlord. Here’s what you need to keep in mind:Choose the right property for your investment goals
Are you investing in homes to flip and sell for more? Or perhaps you’d like to explore East Cobb’s rental market? Part of having a clear plan is knowing which type of real estate you want to invest in early on. Whichever you choose, it should be aligned with your real estate goals.Learn and set the terms
Once you’ve done your research and have a property type in mind, you need to start deciding on certain terms in your investment. This will help you evaluate the potential of various property options, especially when it comes to generating capital.
For instance, the following terms must be considered if you’re investing in a rental property:
- Your projected monthly mortgage payment
- Your projected down payment
- The price-to-income ratio within your target neighborhood or area
- The price-to-rent ratio within your target market
- Gross rental yield, which is the (projected) annual rent divided by the total property cost
- Capitalization rate, which is the net rental yield (annual rent minus annual expenses) divided by the total property cost
Start a tally of yearly costs, taxes, utility bills, and emergency repair funds that might be needed for your investment property’s upkeep. This will give you an idea of how much to charge for rent. If you’re unfamiliar with the area or how to run a rental, it’s best to consult and work with a property manager.
Calculating your investment terms early on can help you manage your finances wisely and prevent you from getting blindsided by unexpected expenses.How are you going to recoup your investment?
Another thing you should consider is the way you want to profit from your investment. One of the most common ways, which you’ll also hear when it comes to traditional homebuying, is through real estate appreciation.
A property’s value increases over time. But the rate at which it grows depends on a variety of factors. Some of these are factors you can initiate or control, such as making certain renovations or upgrades to your property to increase its desirability. Other factors are less controllable, such as new commercial developments in your area or large-scale economic trends like inflation.
A more enterprising way to profit from your property investment is through cash flow income, which is the stream of income you can collect from renting out residential apartments, houses, and vacation rentals.
INVESTING IN EAST COBB SINGLE-FAMILY HOMES
The East Cobb real estate market consists mostly of single-family homes— one of the best asset classes for new investors. Characterized as a stand-alone property with its own utilities and direct access to a street, owning a single-family income property comes with a lot of benefits.A relatively affordable purchase
Single-family properties tend to have a lower down payment than other property types. You’ll have an easier time getting financing if you’re not paying in cash. Homes in Cobb County, where East Cobb and Marietta are located, are particularly cost-effective. The area has a median sales price of $385,000 (November 2022), which is lower than the national median sale price of $393,935 (November 2022).
There are also more financing options available for single-family homes than multi-family properties or commercial real estate. These include conventional mortgages, government-backed loans such as FHA or VA loans, home equity loans, and more.It is an easier rental property to manage
Compared to multi-family properties, single-family homes tend to have low vacancy rates and tenant turnover. Tenants are usually families that need privacy and stability, so they often renew their lease and stay for longer periods of time.
A single-family home is also cheaper and easier to maintain and repair compared to properties with multiple housing units like apartments, condominiums, or townhouses.It is a low-risk property investment
Managing a property can come with unexpected problems and expenses. If you don’t have a lot of experience in property investment, this can quickly put you in the red. But since single-family homes are relatively easy to maintain and manage, they are the best first property investment you can make.
You can also build enough equity in a shorter amount of time with a single-family home, which can be your launching point to invest in other properties. For example, between December 2021 and 2022 alone, median sales prices for Cobb County properties rose by 2.7%.
Although real estate investments generally have low liquidity, single-family homes are one of the easiest properties to market and resell given its consistently high demand among homebuyers and investors.
UNDERSTAND YOUR MARKET
Houses and buildings can be built, upgraded, or demolished, but you can never change a property’s address. Location is a key factor in anything involving real estate; doing your research is key to choosing the right one.
Start by checking out the market values in the area or neighborhood. You can even ask your Realtor for a more comprehensive and accurate market analysis. What’s important is to identify the area’s “selling point,” and what value it can add to the type of property investment you want to have.
Given the suburban nature of East Cobb, consider properties that are near schools, community centers, shopping centers, workplaces, nature parks, and other quality-of-life factors. You can also drive or walk around the neighborhood of potential properties to see its accessibility or privacy.
RECENT AREA DEVELOPMENTS: AVENUE EAST COBB
Avenue East Cobb – the town’s go-to shopping destination and community spot – has been getting a makeover in the past year, and it is expected to open in the latter half of 2023. The redevelopment is orchestrated by North American Properties, the mastermind behind successful renovations of commercial areas like Atlantic Station and Colony Square.
The sudden rise of online shopping, spurred by the Covid-19 pandemic, has caused a crisis for many brick-and-mortar retail centers. To adapt to these changing consumer trends, Avenue East Cobb will be transformed into a more dedicated event and gathering space for the East Cobb community.
There will be a centralized plaza for movie screenings, live musical performances, and various community events, as well as more restaurants with shared outdoor seating and jewel-box buildings for new and old retailers.
GROW AND MAINTAIN YOUR PROFESSIONAL NETWORK
Real estate involves the skills and expertise of various professionals, ranging from brokers and associates to contractors and interior designers. As a real estate investor, you can benefit by learning from, working with, and building connections with these professionals, as well as with other investors.
NETWORKING TIPS FOR EAST COBB REAL ESTATE INVESTORSMake time for the community
Dedicate certain hours or days solely for networking efforts and community involvement. When you can, attend local meetings, support grassroots events, or connect with other members of the community.
The East Cobb Civic Association, Inc, (ECCA), a forum that represents almost 9,000 households, is a great place to start. The ECCA provides several opportunities for homeowner associations and community organizations to be involved in various county government policies and decision-making.
Being active in this association will not only keep you up to date on the latest news and developments in East Cobb, but it can also give you a platform to represent your interests and communicate with other homeowners, residents, and investors.Listen and be responsive
A good way to build connections is simply to engage in conversation. Those who are new to investing and networking assume that you need to be outgoing and chatty with many people to be able to network successfully, but listening and learning from a few people is more than enough.
Whenever you’re at a professional or community event, be sincere and interested in the people you’re talking to. Ask about their interests, investment goals, or even just their thoughts on the event you’re both attending. This will naturally lead to better business conversations and a good start to a professional relationship.Give back to your partners
Focusing on how a potential contact can benefit you, rather than as a genuine professional partnership, can lead to a weak and limited network. Keep in mind that networking is a mutual exchange. Being eager to help others – just as much as they would be willing to help you – is key to a strong partnership.
You can share your expertise or give advice on topics you’re familiar with, especially if it’s an area they’re struggling with. You can even connect them with other professionals or potential clients you know, or leave good reviews on their websites and social media pages. Small tokens of appreciation like these can go a long way in helping your contacts, as well as setting the foundation for a strong relationship.
Having a wide network in the East Cobb community is also important when it comes to actually managing your investment. It’s good to have a list of people you can call to help you when the need arises, including:
- Property managers
- Mortgage lenders
- Real estate agents
- Pest control experts
STAY UPDATED ON THE LATEST NEWS AND TRENDS IN THE MARKET
A good investor is a prepared investor. And to be one, it’s critical to keep tabs on current market trends even after you purchase the property.
Take note of things like property values, average rent prices, population and employment rates, new developments, consumer and migration trends, and other socioeconomic factors that can create potential risks or opportunities for your investment.
Moreover, if you’re planning on investing in multiple properties or locations, take the time to gain experience and expertise in a specific market niche. Whether it’s flipping houses in East Cobb or renting out vacation homes in other Atlanta communities, it’s important to study and understand one particular market first before moving on to others.Learn the rules and regulations
Investing in real estate is ultimately a form of business, and it’s crucial to know the laws and regulations that can affect your property. This can include everything from rental regulations to property taxes, which can change or be updated from time to time. For example:
Cobb County’s short-term rental ordinance
One of the latest developments in Cobb County real estate is the approval of a short-term rental ordinance. This will have a significant impact on investors who own vacation rentals in East Cobb, Marietta, and other areas in the county. New rules and provisions include:
- Having a designated local agent for each rental, who is available to address concerns about parking, noise, and other problems or issues.
- Allowing only one tenant for every 390 square feet of living space.
- Adherence to parking, building, health, and sanitation regulations for single-family zoning.
- Compliance with hotel/motel taxes, tourism fees, and other local and state taxes.
- Having only one active certificate for each short-term rental unit from the Cobb Business License Division.
Revisions to the Georgia Landlord-Tenant Handbook
Whether you’re planning to hire a property manager or be a hands-on landlord for your rental property, it’s wise to read up on the Georgia Landlord-Tenant Handbook, which was revised in February 2021. It includes laws and regulations on tenant rights, the terms and processes involved in entering a lease, landlord responsibilities and right to access the rental unit, as well as the bases and procedures for eviction.
There are also special rules outlined in the handbook that you should take note of. For example, if you are renting out a house or unit built before 1978, you must either have a state-certified inspection that determines your property to be free of lead-based paint or provide future tenants with a lead-based paint disclosure and a Lead Warning Statement in the lease.Be prepared
Any rewarding investment comes with its fair share of risks. While real estate is one of the most stable and low-risk investments out there, issues and problems can still arise and cost you more if you don’t do your due diligence.
According to The Counselors of Real Estate (CRE)®, the top issues affecting real estate – and real estate investors – in 2022 and 2023 revolve around economic and market conditions, government regulations, and risk management. These include:
- Rising interest rates and other attempts to curb inflation, which might continue to cut demand for residential and commercial property.
- Geopolitical uncertainty, such as the Ukraine and Russia war and the long lockdowns in China. These have presented major challenges to the global supply chain and pushed prices for basic commodities upwards.
- The normalization of hybrid work, the decentralization of large, dense urban centers, and the migration to suburbs, exurbs, and smaller municipalities.
- Addressing supply chain disruptions, which have caused material and labor shortages for real estate developers and contractors.
- Increasing awareness and investment in health, well-being, and energy resilience in both commercial and residential spaces.
- Keeping an eye on worker shortage, which can indirectly cause businesses to lease less space.
- Addressing the shortage in low-cost housing supply, which drives many renters further out to the exurbs.
- Adapting to changing regulations, born out of conflict between state preemptive legislation and local control over land use, which can add unexpected risk to on-going development projects as well as impose new restrictions on existing properties.
- Addressing increased cybersecurity risks in commercial real estate.
- The growing importance of Environmental, Social, and Governance (ESG) risk assessment and mitigation initiatives in real estate investment.
Learn more tips on real estate investing with The Page Morgan Team!
Serving home buyers, sellers, and investors in North Georgia for over 30 years, The Page Morgan Real Estate Group has unparalleled experience and expertise in navigating the East Cobb real estate market. From the first phone call to the final signature at closing, we go above and beyond to help our clients make the best decisions in their real estate investment.
Get in touch with our top Realtors to start your investment journey in East Cobb and North Atlanta today. Feel free to send us any questions you may have at our contact page. And when you’re ready to take that first step, call us at 770.579.5650 or email us here.