Choosing between renting and buying a home can be a complicated life decision.There’s no set formula for making the right choice, your financial position, professional requirements, and lifestyle goals will all have major, yet varying, impacts each option. If you want to make an informed decision, you should spend some time figuring out which option is best for your personal, professional, and psychological well being.
However, to ensure that you’re evaluating each option objectively, you also must develop a firm understanding of the Atlanta property market. To get you started, we’ve included an overview of Atlanta’s rental and housing markets.
Rental Market Conditions in Atlanta
Thanks to low vacancy rates, strong population growth, and ongoing economic expansion, Atlanta’s property market is widely regarded as one of the hottest rental markets in the country. Between 2017 and 2018, property investors, spurred by high tenant demand, added more than 22,500 new rental units in metropolitan Atlanta.
However, recent data from RentCafé indicates that over 90% of new rental property construction in Atlanta is reserved for “luxury” real estate development. The surge in luxury rental construction has had a marked effect on Atlanta’s skyrocketing average rent. In the fourth quarter of 2018, Atlanta registered a 4.8% year-to-year rent increase — that’s 1.5% above the nationwide average for rent increases in 2018.
Advantages of Renting
Compared to homeownership, renting is usually regarded as a more flexible living arrangement. When you’re renting, it’s easier to move out and relocate to a new state or county. Renting also makes living in expensive neighborhoods and cities a more achievable prospect.
Less Maintenance Responsibility
Renters can take solace in the fact that their landlord is responsible for repair and maintenance issues. However, renters are still expected to keep their home or apartment clean and in good condition.
Drawbacks to Renting
As a renter, you are legally bound by the terms of your lease agreement. Unless you receive written consent from your landlord, lease rules will generally bar you from personally making any renovations or significant repairs in a rental home or apartment.
No Control Over Rent Hikes
When you are renting a property, there’s very little room for negotiation if your landlord decides to increase the annual rent. In 2018, the average rent increase in Atlanta outpaced almost every other metropolitan area in the U.S.
Housing Market Conditions in Atlanta
After several years of record high sales performance, the Atlanta housing market is slowly showing signs of more buyer friendly conditions. In fact, Atlanta’s housing inventory rose in the first quarter of 2019 — because of a major uptick in new, single-family home construction in late 2018. However, Atlanta’s expanding job market, driven by high-income positions in Atlanta’s burgeoning technology sector, is expected to temper further upturns in housing inventory.
Regional population growth and high buyer demand are expected to sustain 3.9% year-to-year property value growth into 2020. Buying a home in Atlanta remains an affordable goal for most home buyers. While Atlanta’s median home value sits at $259,700, the city’s median sale price is steady at $230,400 — that’s $4,500 below the nationwide average.
Advantages of Buying
When you are renting a home or apartment, the rent value is typically structured to cover your landlord’s mortgage repayments and property taxes. In this arrangement, not only are you financing someone else’s investment, you’re also missing out on the long-term benefits of real estate equity accumulation.
In comparison, when you buy a home, your monthly mortgage repayments — money that would otherwise spent on rent — will improve your financial position, giving you the option of equity financing and increasing your ownership stake in a high-value physical assets.
Repairs and Renovations
After becoming a homeowner, you can say goodbye to landlord restrictions on home renovations, repairs, and decorations.
Because of urban development and regional economic expansion, the Atlanta property market is enjoying considerable property value appreciation. This means you can net a hefty profit when, or if, you sell your home.
Drawbacks to Buying
Prospective home buyers will need to factor in the long-term costs of homeownership. In Atlanta, homeowners should allocate money for utility bills, property taxes, and general maintenance. If you want to plan out a basic budget, we’ve listed further information about these costs below:
- For a 915 square foot apartment, the average cost of utilities in Atlanta is $210 per month.
- Atlanta homeowners can expect to pay ~1.07% of their home value in annual property taxes.
- The consensus is that Atlanta homeowners should budget between 1% and 4% of their home value for annual repairs and maintenance.
Renting Can Be Cheaper
Owning a home can work out to be more expensive than long-term renting. However, studies on this subject are not always indicative of the full picture as they rarely factor in the variable cost benefits of equity creation, property location, and home design.
Still Confused? Contact a Local Real Estate Agent!
If you’re still confused or want to know more about the Atlanta property market, it might be time to get in touch with a local real estate agent. With a good agent in your corner, you’ll be able to access area-specific, comparative market data on rental prices, local economic projections, inventory availability, home values, listing prices, and much more.
If you’re still on the fence about renting versus buying, an experienced agent will offer advice that is both objective and tailored to your personal circumstances.
However, if you’ve already decided to purchase a home in Atlanta, contact Clever and get the buying process started the right way. When you buy a home through a Clever Partner Agent, you’ll not only enjoy local and professional service — you’ll also gain access to a support network of over 3,000 top-rated agents.
Clever buyers can also take advantage of exclusive client benefits, including a $1,000 home buyer rebate and fast-tracked, on-demand property showings.