March 14, 2021

price your rental

We've been digging into different rental markets to show how local knowledge and neighborhood comparables are the key drivers to price your rental. The other factors to consider are the type of unit, amenities, state of updates/upgrades, and any location advantages like proximity to transit, retail, hospitals, and schools. Your rental rate analysis should be data-driven but informed by professional insight and experience. At Rentometer, we use state-of-the-art systems to provide you with accurate and up-to-date rental rate data for housing markets across the U.S.

Atlanta, Georgia, has been an active Rentometer search target in recent months. Let's take a closer look at current trends in that market for housing prices. With that information in hand, we'll then analyze the city's ten most affordable rental neighborhoods to identify rental rates you can expect to earn if you purchase a rental property in one of those neighborhoods.

How to price your rental in Atlanta

Your first consideration is the price of housing in Atlanta. According to Redfin, Atlanta "has a median home sale price of $335K, a 10.7% increase from last year. Homes stay on the market for an average of 50 days and receive an average of 6 offers." This activity level is proof positive that Atlanta is a hot housing market right now.

But what does that mean for real estate investors, who rarely purchase rental properties at retail prices?

The rate of increase in home sales is a positive indicator for any investor, according to Realtor. com®'s 2021 forecast, home sales in Atlanta could grow by 6.7% in 2021, compared to a projected increase of 5.7% nationally. This ranks metro Atlanta among the top 20 markets projected to see considerable home price increases. Atlanta real estate is a hot commodity these days, and with a population of almost 5.8 million people, demand for housing should remain strong.

For an investor, rising home sales signal opportunity, as rental rates typically increase when housing sales prices increase. Expect to see an increase in rental rates throughout 2021.

Savvy investors look for property deals – homes that need some work to bring them up to market quality. Sellers of these properties know they can't get top dollar but recognize it's a good time to sell and capitalize on a strong market. These comb the market for homes that will perform well as renovated rentals or those that represent fix-and-flip opportunities.

Rental rates for metro Atlanta

Here's a review of Atlanta's rental rates across 1-4 bedroom units to arrive a 3-, 6-, 12- and 18-month averages. This summary offers a picture of the area's recovery since the pandemic hit a year ago and how rental rates look right now.

Starting with data from September 2019, a good six months before the pandemic's onset in the U.S., rental rates showed a steady increase.

Type of rental units.   

 24 mo   

 18 mo. 

 % + or -  

  12mo

  % + or -

  6 mo

  %+ or -  

  3 mo

  %+ or -

1 bedroom

 $1292

 $1329

 2.86%

 $1333 

 0.30%

 $1389

 4.20%

$1416

1.94%

2 bedroom

 $1536

 $1546

 0.65%

 $1597

 3.29%

 $1716 

 7.45%

$1747

1.80%

3 bedroom

 $1679

 $1667

 -0.71%

 $1709

 2.51%

 $1778

 6.65%

$1822

2.47%

4 bedroom

 $2084

 $2148

 3.07%

 $2169

 0.97%

 $2296

 6.89%

$2281  

-0.65%

Except for 3-bedroom units in September and 4-bedroom units in December, rents across all unit types increased every quarter from September 2019 until March 2021. This shows steady recovery and growth in the overall Atlanta market.

How can you be sure your rental property is in a neighborhood with good growth potential? Let's look at five of the most popular neighborhoods in Atlanta according to niche.com to determine areas of interest and worth pursuing.

Atlantic Station

This neighborhood has a population of 10,934, with 73% of residents renting. Recognized as one of the best places to live in the state of Georgia, Atlantic Station is close to parks, bars, restaurants, and coffee shops. Economic diversity in the neighborhood is good, and the average income is $62,300. There are 26 public schools in the area, and crime is considered low. The median home value is $211,191.

Type of rental units    

  12months   

  6 months  

  % + or  -  

  3 months 

   %+ or -

1 bedroom

  $1755

  $1872

  6.66%

   $1872

    0%

2 bedroom

  $2278

  $2296

 0.79%

  $2290

  -0.26%

3 bedroom

  $2382

  $2298

 -3.52%

  $2298

    0%

 

 

 

 

 

 

 

Six-month average rental rates across both 1- and 2-bedroom units were strong; 3-bedroom units showed a 3.52% decrease. For the most recent 3-month period, rates for all units are holding steady, except for a slight decrease in rent in 2-bedroom units. Atlantic Station looks like a vital rental area.

Peachtree Heights East

This neighborhood is home to 1,743 people, with 16% renting. This area is considered Atlanta's second-best neighborhood. Economic diversity is good, and the average income is $129,000. There are 23 public schools in the area, and crime is considered very low. The median home value is $599,000.

 

Type of rental units     

  12months  

  6 months  

  % + or -  

  3 months   

  %+ or -

1 bedroom

  $1755

  Low data

 

  Low data

 

2 bedroom

  $2278

  Low data

 

  Low data

 

3 bedroom

  $2382

  Low data

 

  Low data

 

 

 

 

 

 

 

 

With such a small rental population, there's low turnover in the available units in Peachtree Heights East. The current rental inventory does not appear to turn over seasonally, unlike some other areas. Lack of data also signals very few rental turnovers to pull new rate information. This means there could be demand for available rentals, and once the tenants move in, they are likely to stay.

Brookwood

This neighborhood has a population of 6,165, with 61% as renters—it ranks as the third-best neighborhood in Atlanta. Economic diversity in the neighborhood is good, and the average income is $85,319. There are 25 public schools in the area, and crime is considered low. The median home value is $362,970.

Type of rental units     

12months   

6 months  

  % + or -   

  3 months. 

  %+ or -

1 bedroom

$1557

$1476

  5.20%

  $1476

  0%

2 bedroom

$1967

$2004

  1.88%

  $1980

 -1.19%

3 bedroom

$3574

$3929

  9.93%

  $3929

  0%

 

 

 

 

 

 

 

Brookwood has experienced a rental correction from March 2020 to September 2020, like many other areas. Still, rental rates have increased overall over the past year, signaling it a strong area.

 

Midtown

This neighborhood has a population of 26,009, with 57% renting. Midtown is recognized as Atlanta's fourth-best neighborhood. Economic diversity is good, and the average income is $99,662. There are 27 public schools in the area, and crime is considered average. The median home value is $398,646.

 

Type of rental units.  

12months.  

6 months

  % + or -  

  3 months 

  %+ or -

1 bedroom

$1591

$1652

  3.83% 

   $1693

  2.48%

2 bedroom

$2369

$2545

  7.42%

   $2653

  4.24%

3 bedroom

$2969

$3245

  9.29%

   $3381

  4.19%

4 bedroom

$3584

$3982

  11.10%

   $4860

  22.04%

 

With 57% of the population renting in Midtown, this area has demonstrated nice growth over the last year, and rental rates remain strong. Rents have increased across all unit types after diving at the six-month point.

 

Morningside/ Lenox Park

This neighborhood has a population of 14,892, with 37% renting. Morningside/Lenox Park ranks as the fifth-best neighborhood in Atlanta. Economic diversity in the neighborhood is good, and the average income is $146,682. There are 26 public schools in the area, and crime is considered low. The median home value is $621,153.

 

Type of rental units    

12months  

6 months  

 % + or -  

 3 months  

  %+ or -

1 bedroom

$1382

$1460

 5.64%

  $1535

  5.13%

2 bedroom

$1895

$1974

 4.16%

  $2074

  5.06%

3 bedroom

$2913

$2820

 -3.19%

  $2911

  3.22%

 

 

 

 

 

 

 

3-bedroom units in this neighborhood took a slight hit in September but have bounced back to levels just above the year-over-year rental rates. The other unit types continue to hold firm and show good increases every three months. The rent rates look attractive in this rental neighborhood.

Atlanta is a good example of a robust secondary real estate market, especially with its forecasts for population and economic growth. It is worth investigating further for rental property investment. Always consider critical metrics – location, industry diversity, economic diversity – as well as specific property conditions, upgrades, and amenities. Look carefully at the actual neighborhood before buying a rental property. Rentometer reports can give you a good insight into historical trends, make sure you stay on top of current rents, and help you forecast future rent possibilities.

This article was written by the Rentometer Content Team. The Rentometer Blog features fresh takes and insights on rental housing topics, services, and technology. If you liked this article, subscribe to Rentometer's email newsletter to stay up-to-date on the latest trends in rental housing.