A good rental pays you every month, builds equity as the loan balance drops, and gives you a long-term asset that may grow in value. A bad one drains your savings through vacancies, repairs and late payments. The difference usually comes down to the numbers you run before you buy and the way you run the property afterward.
What to look for in a rental
- Location: proximity to jobs, schools, transit and shopping, and a neighborhood with steady demand from tenants
- Condition: a home that is safe and sound now, because deferred maintenance gets expensive
- Price versus rent: the rent it can really command compared with what you pay and what it costs to own
- Property type: single-family, small multifamily or townhome, each with a different tenant pool and cost structure
Run the full picture
Start with the rent, then subtract everything that comes out of it:
- Mortgage payment, if you finance
- Property taxes and landlord insurance
- Vacancy, because every unit sits empty sometimes
- Repairs and maintenance, plus a reserve for big items like the roof and HVAC
- Property management fees, if you hire a manager
- HOA dues, if there are any
What is left is your cash flow. Many investors also look at cash-on-cash return and cap rate to compare properties. These measures help, but they are only as accurate as the numbers you put in.
Landlord basics
Georgia has rules on security deposits, notices and evictions, and local governments may add their own requirements. Screen tenants consistently, use a written lease, and keep records. Talk to an attorney or an experienced property manager about the rules before you list a unit.
Financing a rental
Loans for investment property usually have different down payment and rate terms than loans for a primary home. Talk to Nil about approved lenders who work with investors. Some buyers purchase with cash and refinance later, which is the idea behind BRRRR and house hacking.
How we help
We search for rental candidates across Atlanta, Brookhaven, Decatur, Duluth, Ellenwood, Griffin, Hampton, Lawrenceville, Lilburn, Locust Grove, McDonough, Norcross, Snellville, Stockbridge, Stone Mountain and Tucker, tell you what we see in the numbers, and connect you with contractors and property managers when you need them.
Nil Patel is a licensed Georgia real estate salesperson with Keller Williams Realty Atlanta Partners. This page is general information, not legal, tax or financial advice, and nothing here is a commitment to lend. Talk to a lender and a real estate attorney about your own situation. Investing involves risk, and past results do not guarantee future results. If Nil, a team member or an affiliate wants to buy a property directly, that buyer will say so in writing before you sign.