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Atlanta continues to be one of the hottest real estate markets to rebound since the recession continuing through First Quarter 2017.  But, before we analyze the numbers, sellers must realize the following:

  1. Price and condition account for 80% of buyer interest and acceptance for any property therefore what needs to be done should be done to present your house in the best possible way.
  2. Nobody can dictate at what price your house will sell. The market will determine the price that buyers are willing to pay. When you price your house too low, the market will raise the price due to multiple offers over the price.
  3. Rather than using emotion, guesswork or assertions to arrive at your listing price, a good agent helps the Seller understand the real Atlanta market data, showing what actually happened to other sellers in the current market, as it reveals the most likely outcomes of pricing strategies for you. Using overall metro market statistics provides good agents with a large enough data set of real outcomes to feel comfortable that they will be likely to happen in future transactions, allowing us to take advantage of this knowledge to price your property to achieve your goals.

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Capitalization Rate Explained

Posted on June 5, 2017 by

Every time I mention a capitalization rate to a group of learning based, future investors, I get this blank deer in the headlights’ look (not that I have stared many deer in the face). So I decided to simplify the meaning and amplify the importance.

Thecapitalization rate(R) is the rate of return used to estimate the property’s value based on that property’s net operating income. Often called a Cap Rate (Rate), it is the method for determining the attractiveness of the investment for the potential purchaser.

First one needs to understand net operating income (NOI). The net operating income is the annual income minus all expenses. Expenses would include taxes, insurance, management fees, homeowner’s insurance, common area utilities and any other expenses that is paid toward running this particular piece of real estate. It does not include the mortgage… never. This rate of return assumes that the property was paid for with cash. Therefore, when you see income on this formula, we are talking about the net operating income, or, NOI which we will use the single letter I to designate.  Read More→

The Residential Market in Atlanta is HOT! This is evidenced by the rapid quantity of homes that are flying off the market in a matter of days, providing they are in proper condition and priced correctly. A Seller’s Market occurs when the number of properties available for sale divided by average monthly sales to calculate how long it would take to sell the current inventory if no other properties were listed – when that number equals 6 months or less, a Seller’s Market exists. Our metro Atlanta market became a Seller’s Market during 2012 resulting in several changes benefitting sellers, as illustrated here using the peak of the Buyer’s Market compared to where we were in 4Q 2016.  Read More→

After beefing up its film incentive program in 2008, Georgia has emerged among the top places in the world for film production.  In less than a decade, Georgia has quickly become the “Hollywood of the South” with more movies and TV shows filming in the Peach state than most places around the world. A recent study has put Georgia as the third largest film industry in the world only behind the United Kingdom. However, with the recent BREXIT issues, Georgia’s film industry is expected to exponentially grow and possibly become the number #1 filmmaking location in the world.

For those that don’t know, Georgia gives film, television and digital entertainment a tax credit of up to 30 percent. Georgia’s Entertainment Industry Investment Act provides a 20 percent tax credit for companies that spend $500,000 or more on production and post-production in Georgia, either in a single production or on multiple projects with no caps on amount spent. Then, the state grants an additional 10 percent tax credit if the finished project includes a promotional logo provided by the state. If a company has little or no Georgia tax liability, it can transfer or sell its tax credits as well. These credits create significant cost savings for the production companies producing feature films, television series, music videos and commercials, as well as interactive games and animation.  Read More→

Atlanta continues to be one of the hottest real estate markets to rebound since the recession continuing through third quarter 2016.  But, before we analyze the numbers, sellers must realize the following:

  1. Price and condition account for 80% of buyer interest and acceptance for any property. What needs to be done to present your house in the best possible way?
  2. Nobody can dictate at what price your house will sell. The market will determine the price that buyers are willing to pay. When you price your house too low, the market will raise the price due to multiple offers over the price
  3. Rather than using emotion, guesswork or assertions to arrive at your listing price, a good agent helps the Seller understand the real Atlanta market data, showing what actually happened to other sellers in the current market, as it reveals the most likely outcomes of pricing strategies for you. Using overall metro market statistics provides good agents with a large enough data set of real outcomes to feel comfortable that they will be likely to happen in future transactions, allowing us to take advantage of this knowledge to price your property to achieve your goals

For the purposes of this article, my statistics for the third quarter are about the numbered areas below.  Read More→

There are many reasons why Atlanta and Georgia have better rental returns than other areas of the country. Let’s analyze some of the reasons for our good fortune.

Employment

According to the Bureau of Labor Statistics, the total nonfarm employment for the Atlanta Metropolitan Statistical Area stood at 2,667,800 in August 2016, an increase of 71,000 or 2.7 percent, from a year ago. Regional Commissioner Janet S. Rankin noted that the Atlanta area had year over year employment gains of over 50,000 each month since July 2013. Nationally, nonfarm employment increased 1.7 percent from August 2015 to August 2016. The study had a few interesting observations or predictions. First they expect the fed to increase interest rates but fortunately by only .25-.5 points.  Read More→

The Atlanta Commercial Market

Posted on October 3, 2016 by

Costar is a $1 billion, national comprehensive commercial database that provides marketing, statistics, demographics, traffic counts, true ownership, and other information on over 4.5 million commercial properties for national commercial real estate agents.  They have researchers that make over 10,000 calls per day to brokers, agents, and owners to verify or change information making 5.1 million data changes per day.  Recently, Costar purchased Loopnet which is a commercial platform available to the public.

Costar does Market Research Reports for major cities across the US which is what we are using for our comparison.  Costar clients include:  Read More→

As an agent for 35 years, I am that real estate agent that truly loves real estate.  Yes, at the gym, or riding in a car on vacation, or, sunning on the beach, you will find me reading the Atlanta Journal-Constitution, Atlanta Business Chronicle, Neighbor Newspapers, Realtor Magazine, and the list goes on and on.  I have this keen thirst for knowledge about what is happening and where and when in my home of over 50 years, Atlanta. Therefore, I decided local investors and rehabbers would really appreciate a synopsis of events affecting value in our city.   I am breaking these events into area factors or areas of town for your convenience.

Several factors in Metro Atlanta are affecting area growth:  Read More→

Atlanta, Georgia is one of the strongest real estate markets in the US and has favored Sellers rather than Buyers since spring of 2013. According to Realtor.com, the median list price in Atlanta has gone from just over $200,000 in 2014 to over $300,000 in 2016 and is currently leveling off. A $100,000 median price gain in two years is nothing short of fantastic. See Figure 1.

Figure 1

Figure 1

For the purposes of this article, we are talking about single family detached in these areas. See Figure 2. Read More→

Land and lots just sat on the market for years during the last economic down turn and now are a hot commodity on this hot market.   What most people do not realize is that land is a much more complex transaction.  

PROPERTY

How large is the property?  Typically a lot is sold with an individual price for the entire parcel.   Larger tracts are often sold at a price per acre times the number of acres.   Properties in downtown areas with high density zoning are sold by the square foot, so a couple of inches will change the price. 

ZONING

First, what is the highest and best use?   Determine first whether the property in the city or in the county. If it is in city limits, go to the city’s zoning ordinances.  If not, go to county zoning.   Is it residential, commercial, or agricultural? What is the zoning on the property? Zoning is usually stated on tax records.  Unfortunately, all the counties and cities in Georgia have their own zoning codes and what holds true about a zoning code in one area, is totally different in another.  Generally speaking, in order of density: Read More→

Introduction

As an agent with Keller Williams Realty First Atlanta for 15 years, I have watched our company grow from “Keller Who?” to Keller Williams Realty being the number one company in Georgia, and, our office being the number one office in the state of Georgia. Over this time period, the internet has become a dominate factor in communication with clients, and, between agents. Of recent, our office intranet (370 agents) and our company Facebook have become abuzz with agents requesting corporate rentals, also known as Short Term Furnished Property Rentals or Vacation Rentals in many tourist destinations and now many major cities.

My dearest friend of 20 years, Renata Circeo Louden, whom I have sold at least a dozen Atlanta properties to or for, and, who was the only rent and hold investor in Gary Keller’s Millionaire Real Estate Investor (page 364-I nominated her for the book), has had a successful vacation and corporate rental property management company in Atlanta and Destin, Florida for over 15 years managing over 100 properties. As she owns 20 properties in Atlanta and the Destin Area herself, she jokes that “I bought myself a job.” However, she manages to net her clients more money per year with less hassle, which is the reason of her tremendous growth.  Read More→

This past February, I attended the Keller Williams Family Reunion in New Orleans, along with 15,000 other “Type A” real estate agents. One of the highlights of this convention is Gary Keller’s Vision Speech. He makes this speech to educate us, so that hopefully, we will be the economist of choice in our market.

“You have to look at the past to predict the future”, says Gary Keller, “Mortgage rates are national rates.” Keller said, “While the government does not exactly know how to raise rates, but, low rates are helping affordability in most U.S. markets.” Mortgage rates averaged 3.85 percent in 2015, down 32 base points from the 2014 average. Since the Federal Reserve is now actively raising the federal funds rate, it is expected there will be upward pressure on mortgage rates in 2016.

Last year was the 5th best year in home sales in the history of home sales due mostly to the mortgage rates being so low. In 2015, 5.26 million homes were sold, making it the best year for home sales since 2006, which was the height of the market. In 2016, some slowdown in sales is expected as interest rates slowly increase. Read More→

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