Athens, GA Real Estate: Where to Spend Money in Your Home

Here in Athens, real estate seems to be doing very well. Another area that is currently thriving is construction.  Builders are back building new homes, and contractors are booked up for months.  It seems that there are renovations going on all over town, and it is definitely a good time to be a contractor.  As we all know, supply and demand are tied together. under-renovation Therefore, if the demand for contractors is higher than you should probably expect the cost to be higher as well.  Conversely, if you look back to 2010 the cost was lower due to the lack of demand.  As I mentioned before, the 5 Points and Normaltown areas are seeing a lot of renovations and remodels.  Depending on your taste, you may or may not like the trend.  But trust me when I tell you that it is a good thing for our community.  When people invest in their home it is a sign of confidence in the market.  It also a good sign when builders invest in properties.  However, the one thing to watch out for is supply.  You never want to see the supply greatly exceed the demand.  All that aside, many homeowners are taking advantage of the low interest rates and investing in their homes.  This is great to see, but it is an area that many homeowners need advice because they often make mistakes.

HGTV-showchip-property-brothers
Property Brothers on HGTV

Thanks to the wonders of HGTV, many of us watch remodeling shows all the time.  The problem with these TV shows is that they are just that…TV shows.  For instance, Bill Cosby made raising kids seem fairly easy and often humorous.   Well it is often funny, but it may be one of the hardiest things a person will do in their life.  TV shows are not always based in reality.  This is especially true with so called “Reality TV Shows”.  If you pay attention to the credits in some reality shows they give credit to “writers”.  How in the world can a “Reality TV Show” have a writer?  My point is that these shows are fun and entertaining.  They are good for giving us ideas, but keep in mind that what works in California may not work here in Georgia.  HGTV-showchip-flip-or-flop Too often homeowners get excited and spend money in the wrong areas.  So where should homeowners spend money in their house? In my opinion, homeowners should focus on three main areas when upgrading or investing in their property.

  • Maintenance
  • Livable Space
  • Up Dates

First, you must spend money on maintenance.  This is commonly overlooked by a majority of property owners.  You absolutely have to maintain your property. Maintenance comes first no matter what.  It makes no sense to put in cultured marble if you have rotten windows.  The issue here is that most people don’t see the deferred maintenance.  But they can easily see a new bathroom.  If you do not maintain and upkeep your property it will definitely cost you money in the long run.  The next area that owners should focus their money is in the main living area or even adding more livable space.  Everybody seems to focus on bathrooms and the owner’s suite.  And these can be good areas to put money if you have it to spend.  But be warned that you may not get it back.  You need to be careful with how much you spend in areas like a master bedroom or bathroom.  In some cases, it is smart to upgrade them or make them larger but you can overdo it quickly.  You need to understand that people don’t live in their bathroom or bedroom.  They sleep and shower there, but they live in the rest of the house.  Buyers want large and functional kitchens with open living space.  Any outdoor living space is always a huge plus as well.  Storage can be a big plus, and if you want to expand a master it would be wise to make sure the closets are spacious.  Lastly, it is important to keep your house up to date or least keep it from becoming too dated.  Some older houses have fantastic space, but they have not been touched in 30 + years.  Therefore, they eventually sell at lower price because the entire house needs updating.  Which creates a good opportunity for a buyer to purchase the property low.  I am not suggesting that you remodel your kitchen and redecorate every 5 years.  However, if you are in your property for 15 years you may need to update a few things.

In closing, you will need to spend money on your home no matter what.  At the bare minimum, you need to maintain the property.  But if you take it a step further and renovate.  Be sure to do it wisely.  In the end, your home belongs to you, and you can decorate or upgrade it any way that you see fit.  But if you ever plan to sell it would be smart to consider future buyers.

If you have any questions or real estate needs, please don’t hesitate to contact me or visit my real estate brokerage firm, 5 Market Realty.

Athens, GA Real Estate: The Normaltown Market

As I have mentioned before, Athens is a very unique town for many reasons.  It is a small city but it has a lot to offer.  There are great restaurants, good shopping, great music, and of course there are numerous events in town throughout the year.    But in terms of real estate, Athens is unique because it provides so many options for buyers.  Buyers can choose to purchase in one of several “in town” locations or they can opt for more space and land in one of the many outlying areas that are usually within 15 to 20 mins of downtown.

Normal Hardware On Prince Ave
Normal Hardware On Prince Ave

Recently, I have discussed the 5 Points area and the East Side of town.  Both of which are examples of different “in town” options for buyers.  Another great option for buyers in Athens is Normaltown.  Normaltown is one of the oldest areas of town, and it has a rich history.  In fact, it was the first area of Athens wired for electricity in 1896 or so I am told (didn’t fact check this one).  But in recent history it has seen a lot of positive growth in business and real estate.  So today let’s take a look at the growth and real estate values in the Normaltown area.

First of all, to discuss the Normaltown area you need to define it geographically.  Traditionally, the Normaltown area has been considered the area or neighborhood located in or around Athens Regional Medical Center on the South side of Prince Ave. armc  Meanwhile, the nearby Boulevard area is located on the other side Prince either on or around “Boulevard”.  If you have not visited Boulevard then I highly suggest you take the time to drive down the street.  Many of Athens’ oldest homes are located in the area.  So for the purposes of this blog, we will refer to Boulevard and Normaltown as one general area even though they can be defined separately.

I have talked about the importance of location numerous times already.  But the Normaltown area serves as yet another example of where location raises value.  The 5 Points area is centrally located, but one could easily argue that Normaltown is a superior location. t-27756-005 For example, Normaltown is very close to downtown and in close proximity to a major hospital.  With the recent opening of UGA’s Health Sciences Campus, it is right next to an area of UGA. Additionally, when you head west on Prince Ave you will arrive at I-85 in about 20 mins or so.  Not to mention, that most of Normaltown is zoned for Chase Street Elementary which has become a very desirable school district.  Lastly, the area has seen an increase in places to eat and gather for a drink.  As a matter of fact, many Athenians now prefer to grab a drink in Normaltown and avoid the crowd downtown.

However, every area has its ups and downs so to speak.  But much like 5 Points, the disadvantage of Normaltown could also be seen as an advantage.  Due to the age of the area, many homes are older and not up to date.  Nevertheless, this creates a lot of charm and character in the neighborhoods which many buyers are looking to find.  Furthermore, both builders and home owners are updating the homes and floor plans which is similar to the current trend in 5 Points.  Surprisingly, it may cost you a little less to purchase in Normaltown than it would in 5 Points.  It really all depends on the property of course, but in general the price per square foot (PSF) in Normaltown is less than 5 Points.  The most recent comps in Normaltown support a price up to $175 PSF for a newly renovated and well located property.  This is a good deal lower than the current prices in 5 Points which can exceed $200 PSF.   Nevertheless, you can find homes in the area with a much lower price tag.  But if you find a good house to buy in Normaltown be sure to act fast.  It is currently one of the most competitive areas in town.

We are definitely experiencing a strong market right now.  This is true for many areas in and around Athens, but you should also understand that “trees do not grow to the sky”.  This doesn’t mean that values will suddenly fall, but you cannot expect a property value to go up indefinitely.  On the other hand, if you buy in a well located area that is desirable to many buyers your value should hold up better over time versus other locations. And Normaltown is a prime example of a well-located and highly desirable area.

If you have any questions or real estate needs, please don’t hesitate to contact me or visit my real estate brokerage firm, 5 Market Realty.

Athens, GA Real Estate: East Side Value

Athens is a great community that is driven by our wonderful university.  As I have mentioned before, the university brings many different people to Athens which helps create a unique population here in town.  Even though Athens is geographically small there are many different areas one can choose to live.  Each one of these areas has its own advantages that may or may not appeal to different people.  But the east side of Athens is an area of town that is often undervalued and under appreciated.  And that can provide buyers in Athens an opportunity.  We all know that the real estate market is recovering.  In some areas it has fully recovered and other areas aren’t quite there but are progressing.  Here in Athens, you hear a lot about 5 Points, Normaltown, and Oconee County.  And we just don’t hear as much about the east side, but that doesn’t mean it is without value.  In fact, the east side offers a lot of value and may offer more as time goes on.  I am not referring to value with regards to its worth or price.  But value in terms of what you get for what you pay.  So this week let’s take a look at the growth and value on the eastside of Athens.

DSC04121edited
University Heights Entrance

Athens’ east side of town is a fairly large area, but in general it begins once you cross the North Oconee River heading east.  To the north, that begins on Oconee Street just past downtown, and to the south it begins where College Station road and The Loop intersect.  The east side of town is primarily comprised of residential neighborhoods. For example, University Heights, Green Acres, Cedar Creek, and Falling Shoals just to name a few.  However, the east side like most of Athens has plenty of student areas as well.  The student housing areas are concentrated on Barnett Shoals between Lexington road and Gaines School, yet those are not the only student housing options.  Nevertheless, the majority of east Athens is comprised of residential neighborhoods.

DSC04143edited
Vet School on College Station

You don’t have to be a real estate agent to know that real estate seems to be more affordable on the east side of town. Over the years, that has generally been the case and there are reasons for the difference in price.  One main reason maybe that Atlanta is located to the west of Athens.  It is only natural that Athens would see more growth towards Atlanta than Augusta over the last 40 or 50 years.  When I was in school the eastside had a lot less to offer than it does now. First of all, there were less amenities and fewer places to eat,  but now the east side has two great grocery stores, several restaurants, and even a few places to grab a drink.  These are all good things, but the biggest thing to happen on the east side of town has come very recently. And that is the opening of UGA’s new Veterinary Medical Center.  Better amenities and the new vet school serve as two good examples of where the east side can offer convenience and good location.  But what are the real estate costs?

In other areas of town, buyers often have to pay well over $250,000 just to get a house in need of work with no upgrades.  On the eastside of town, buyers can pay much less and receive more.  Falling Shoals serves as a good example of an east side value.  Falling Shoals is a swim/tennis neighborhood with great amenities located about 10 mins from UGA.

Falling Shoals Tennis Court
Falling Shoals Tennis Court

That is much closer than many west side locations and Oconee neighborhoods.  But the price tag is much lower.  In Falling Shoals, resale homes with over 2,000 sq. ft. sell around $230k, and there are still a few new homes available that can be purchased around $250k.  The price per square foot makes Falling Shoals a real value for many home buyers and families.  A similar value is offered in some of the older neighborhoods as well.  For instance, Green Acres and Cedar Creek are located closer in and still offer a good value per square foot. In Green Acres, a large house on a basement would probably sell close to $170,000.  Meanwhile, a smaller brick house with no upgrades might be purchased below $130,000.  At today’s interest rates, these prices make home ownership available to many more buyers.  In my opinion, there may be real opportunity in other areas as well.

DSC04135edited
Vet School on College Station

As I mentioned before, UGA recently opened its new Veterinary Medical Center on the corner of Barnett Shoals and College Station.  This is a good thing for the whole area and UGA.  But its impact on the east side could be fantastic.  Essentially, the university now extends to the end of College Station road making all of the east side more convenient for vet students and professors.  More importantly, University Heights is now situated between the vet school and UGA’s main campus.  In case you didn’t know, University Heights is the neighborhood located off of College Station road between Research Drive and the vet school.  I don’t have a crystal ball, but the vet school could increase prices in University Heights over time.  The homes are older and many are rentals.  But the location is close to campus, 5 points, and not far from downtown.  And of course, it is right next to the vet school.  Given that prices in University Heights range from $100k to $150k it provides more value and opportunity than many other areas in Athens.  Granted, most east side homes will likely never have a price tag as high as some other locations. But that doesn’t mean it is a bad investment.  In the end, it may offer the most bang for your buck in all of Athens.

If you have any questions or real estate needs, please don’t hesitate to contact me or visit my real estate brokerage firm, 5 Market Realty.

Athens, GA Real Estate Value: 5 Points

The last 5 years have been a little crazy for real estate all over the country. And Athens, GA serves a prime example of what was good and what was bad.  I am sure you can remember what it was like 5 years ago.   Our economy was in full recession which was created by the mortgage crisis, and the real estate industry was suffering.  We experienced a record amount of foreclosures along with a sharp drop in real estate values across the country. What-is-my-home-worth-mascot I think it was late 2010 or early 2011 that we finally saw the bottom.  After that the only direction to go was up and boy have things gone up.  Here in Athens, we have seen many areas of the market make a full recovery.  Granted, not every area of town is all the way back but the recovery is evident.  So what areas have recovered the most?  If you go by the numbers the strongest real estate values are in three primary areas:  5 Points, Normaltown, and Oconee County.  Oconee is a large county and not every location is strong but in general the area is doing very well. I plan to discuss the values and current trends for each area or market in Athens over several blog posts.  But since our office is located in 5 Points it makes sense to start there.

 

5 Points is the general area that runs from UGA’s south campus and ends around Baxter street and the Alps road area.    It is an older area of town and is considered to be a very central location.  Subsequently, it has always been a desirable part of town.  You would have to go back a long ways to say otherwise.  In 2010, 5 Points values were much lower than today.  Nevertheless, when compared with other areas of town it was still one of the strongest.  But lately there has been a huge comeback and increase in values. 5 Points Clockeditededited  This is of course due to the location and traditional look of the area.  During the recession, values were topping out around $150 PSF, but when the recovery began 5 points was positioned to boom.  Have you ever heard to buy low and sell high?  Well 5 Points real estate serves as a great example, and many home buyers were able to take advantage of a depressed market from 2009 to 2012.  As of today, some values in 5 Points are over $200 PSF.  For instance, if a house is fully renovated or up to date it may easily achieve a value of $200 PSF or greater.  On the other hand, if a house is small or drastically out of date the value can be much less.  With respect to residential lots, the dirt in 5 points is worth more than any other dirt in town.  So what caused this value or boom?

Well there are many reasons.  First of all, 5 Points is right next to UGA, and the university is a desirable area of town where many people work.  Convenience could be considered another driving factor.  Over the last several years, we have seen more and more people want to live closer in to town.  Nowadays more people want to walk or bike to places and 5 Points can provide that option. In general, the overall driving force behind 5 Points is location which should be no surprise.  But every area has at least one drawback.  In 5 points, the drawback could be seen as the age or size of the homes.  Many people love older homes and their charm so to speak.  I am definitely one of those people.  I enjoy the unique characteristics of older homes and neighborhoods.  I enjoy the feel of a home that has been lived in or has a history.  Unfortunately, many older homes do not have much space.  Many of us have grown accustomed to large kitchens and open floor plans along with expansive closet space.  But older homes were just not designed in this manner and this can obviously be a drawback to many buyers.  Nevertheless, people are working hard to make houses up to date in 5 points.

You are probably aware that numerous renovations have taken place in 5 Points and more are underway.  Depending on your taste, you may or may not like this new trend.  In my opinion, some renovations look fantastic and others could have been done better.  I don’t want to get into a discussion about which renovations are good and which are not.  But the fact is that every home needs to be kept up or renovated from time to time.  Overall, this is a good thing for the 5 Points area.  It also proves the rule that people will sacrifice and work to be in a good location.  In summation, the 5 Points area has proven to be a desirable area in good times and bad.  It remains a great location to purchase a home or invest in real estate and should be for years to come.

If you have any questions or real estate needs, please don’t hesitate to contact me or visit my real estate brokerage firm, 5 Market Realty.

Investment Real Estate 102: What is a Cap Rate?

Previously, I posted a blog that addressed investment real estate for beginners.  In general, I wanted to outline some key things to consider when purchasing real estate as an investment.  Now I would I like to delve a little more into determining a value for investment property.  Value and price are obviously important components of buying an investment property, and there are many tools that people can use to find a value.  In general, I do not adhere to one set rule for finding value.  I have found that each property is different and there are numerous factors you need to consider. download  But many investors use certain methods to evaluate properties.  For instance, gross rent multipliers, internal rate of return, and cap rates.  All three are useful ways to compare and value investments. But the most commonly used is probably the “cap rate” or “capitalization rate”.  You may or may not have heard people use this term.  It can be confusing and misleading to buyers or new investors.  I am not a text book writer, but I will try to explain or clarify the term and its use in real estate.

Generally, speaking the capitalization rate is a valuation used to compare real estate investments.  A cap rate seeks to find a ratio in the relationship between a property’s income and its purchase price or value.  To find the cap rate, you need to determine a property’s “net operating income” or NOI.  Net operating income is all the income for a property minus the operating costs.  For the purposes of a rental property, the operating costs include: property taxes, insurance, hoa costs, management fees, and other maintenance.  When calculating NOI they DO NOT INCLUDE:  debt, depreciation, income tax, and improvements.  For example, if a property makes $18,000 a year after property taxes, insurance, etc. than the Net Operating Income (NOI) is $18,000.  Please remember this DOES NOT INCLUDE a mortgage payment.  Once you know the NOI you can find a cap rate.  Below is a simple formula used to calculate a cap rate:

Net Operating Income(yearly) / Price = Cap Rate

Conversely

Cap Rate X Price = Net Operating Income

It is a fairly simple formula. But you may have noticed something about this formula.  Where do you get a number for price? CAP-Rate-balance Without price you cannot determine a cap rate.  So essentially, you can make a cap rate whatever you want.  One could simply make the price as high or as low as they want.  What you need to understand is that the “cap rate” is just a way to express the relationship between the price and income.  It is not ideal for finding value but better used to compare properties.  Sellers offer investments at a price with a cap rate in mind but the real price is not determined until it is sold.  In general, a higher cap rate means a lower value, but that could be a sign of a good buy depending on the market.  You need to remember that cap rates are specific to the area.  If cap rates are 7% in your area, and you find something at 9% than you may have found a good deal.  But if cap rates are 11% in an area, and you find something at 9% than it may or may not be a good deal.  Be sure to understand all the circumstances surrounding a property.  This is another reason why it is helpful to find a professional to help you because knowing the local market is crucial when looking at cap rates.

I never like to talk over a client’s head, and cap rates seldom come up when I am working with someone to buy student rental property in Athens, GA.  But it is a tool for many investors, and it never hurts any investor large or small to understand value methods.  In the end, I am not a huge fan of cap rates.  Expenses can vary year to year especially for large items and the interest rate on the mortgage is not considered.  There are many types of investment properties.  Hotels, warehouses, and commercial office buildings just to name a few. And cap rates are often be more applicable to these larger income properties.  They can be useful, but it is not necessary for new investors to get too caught up with cap rates when buying individual rental properties.

If you have any questions or real estate needs, please don’t hesitate to contact me or visit my real estate brokerage firm, 5 Market Realty.

5 Points: Thoughts on the Springdale Rezone Proposal

You may or may not be aware, but a proposal to rezone a tract of land on Springdale was recently denied here in Athens.  The property is located at 348 Springdale street(pictured) right in front of Stanton Way and adjacent to the end of Rocksprings.  Currently, there are two existing houses and a tennis court on the site.  The property was recently for sale and is now under contract with a builder/developer.  348 SpringdaleIn general, the rezone proposal was submitted to increase the density of the land.  The property is currently zoned RS-15 which means it can be subdivided into 15,000 sq. ft. lots.  That would currently yield around 6 houses or lots.  The plan submitted wanted to achieve 14 townhome sites for an “age in place” style development.  Basically, the builder was planning to develop the site into high end town homes targeted to a 50 + age group.  In theory, it would be very similar to the “Villas at 5 Points” which are located where Westview meets Lumpkin.  It sounds simple enough but rezones can sometimes be quite difficult.

The proposal was denied, but in my opinion the overall idea was sound and could fill a much needed void in the market.  I do think that the proposed development was flawed and needed to be improved.  But I do believe the location could be utilized for an “age in place” development if it was done wisely.  In my job, I often talk with clients that would love to live close in to town with plenty of space and low maintenance.14656703  We have a huge population of people that are getting ready to retire.  You may have heard of them.  They are called “baby boomers”.  That being said, Athens is now an ideal place for people to retire.  We all know that Athens has a lot to offer young people and families.  But when you think about it has a lot to offer someone over 60 as well.  In some cases, people just want to come back to live in Athens because they went to school here and love our city.  So what happened? Why wasn’t it approved?

Keep in mind these are just my opinions and you can agree or disagree.  First, of all when someone wants to increase density in Athens people tend to get their guard up.  Their guard goes up because increased density often brings the dreaded “college students”.  I say this with some distain because I don’t understand why so many people in town dislike the students when our entire economy is based on them living here.  In any case, this proposal was not targeted or designed to sell to UGA parents. 348 Springdale Sign Granted, sometimes you cannot keep a parent from buying a nice property in any location.  But I feel confident the builder intended to market this project to older citizens.  However, some folks in town do not agree.  They felt it was a cover to build more student housing.  I have to admit that student housing is not the ideal use for the neighborhood.  Nevertheless, Towne Club, a wildly popular student community, is located on Springdale and has been for many years.  In fact, there are many rental properties in the immediate area.  Regardless, Springdale remains a great street and a desirable location to buy.   On the other hand, there are some that just don’t think it would work because of the site’s location.  I can understand some of those objections, but there just aren’t many sites like this left in the 5 Points area.  The location is a block from Cloverhurst and down the street from Milledge and Baxter.  In theory, any resident could walk to dinner or a football game.

As I stated earlier, I think the plan as proposed would need to be improved, but I was disappointed to see how vehemently it was ridiculed and denied.  Many residents in the area dismissed it immediately and never gave it much of a look.  For instance, many people on the “Friends of Five Points” list serve immediately rejected the idea.  That being said, the builder did not hold an open forum to discuss or educate people in the area about the proposal.  It may have been helpful if residents could have had an opportunity to hear or see the vision for the property.  Every citizen of Athens is entitled to their opinion.  And many of us have different ideas about what is good for our beloved town.  I never want to discourage conversation, and this project is an example of poor communication and little conversation.  It may have had a chance with a little more positive input and of course some changes.

Thanks to our fantastic university we have a very diverse population.  It is one of the best things about our town.   We have so many different people with different world views living in this small college town.  I think Michael Stipe once said, “What makes Athens so great is that it is so very southern yet so very accepting of different people.”  Maybe he never said that, but I was once told that he did and I liked it.  If he didn’t say it than someone did.  So we have a great town with all these great people living here.  But we need to do a better job of communicating and discussing our growth and development.   It seems one segment of the population is quick to dismiss a new development and another segment is a little too quick to embrace it.  Maybe there is a happy medium.  Athens has developed a reputation of not being “business friendly”.  For example, remember the huge objection to the Walmart grocery store downtown?  I am not sure all those people against Wal-Mart were wanting a large student housing development instead. It serves as an example to “be careful what you wish for.” Well this has turned into quite the rant.  In closing, I just think that when someone wants to invest or develop in our community residents and builders both need to listen a little more and yell a little less.

If you have any questions or real estate needs, please don’t hesitate to contact me or visit my real estate brokerage firm, 5 Market Realty.

Investment Real Estate 101

Investing in real estate is an absolute must for any person or family.  At the bare minimum, you need to own your home and not rent.  There are too many advantages to owning real estate, and if you don’t take advantage it can hurt you in the long run.  People invest in real estate for many reasons.  Most buyers purchase real estate to build equity and appreciation in their personal home. Others take it a step further and buy real estate solely as an investment and not for any personal use. 101 Real estate investment is often a good idea and a necessary part of a balanced portfolio, but new investors need education on real estate as an investment.  For example, how does one determine a good price or fair value?  There are many ways that investors determine a property’s investment value.  For example, gross rent multipliers, cap rates, and the internal rate of return.  These are all good barometers but require more explanation and may be a little advanced for “Investment 101”.   For now, I only want to discuss the basics to consider when getting starting in real estate investment.

When most people think of an investment they generally think of the stock market, a 401k, or an IRA.  All three can be good tools for investment, but what most people don’t realize is that real estate has been one of the best performing investments throughout history.  Real-Estate-InvestorsTo put it simply, it is a real asset and they aren’t making any more of it.  Meanwhile, the population continues to grow and people continue to live longer.  And all of those people need places to live and work.  There are many areas where you can invest when it comes to real estate.  For example, rental housing, commercial buildings, or land just to name a few.  But one of the best areas to get started is residential rental properties.  Athens, GA is a great college town with a major university.  Therefore, residential and multi-family rentals represent a large part of the investment opportunities in the area.  Having a large state university in Athens creates a strong rental market.  Because of UGA, there is a steady supply of people that need short term housing which makes Athens an ideal place to purchase investment property.  So what do you need to know when it comes to investing in rental properties?  There are numerous factors to consider when investing, but the three most important are location, price, and time frame.

Everyone should understand that location is important in real estate, but it is especially true when purchasing investment property.  The location of a property is directly correlated to its desirability and ultimately the rental income.   If a property is well located it will have less vacancy and more resilient rates.  For example, if you are buying a property to lease to college students make sure it is located in an area desirable to college students.  Conversely, if you want to rent to families than you may want to find a property in a good school district.  It is also important to understand that a well maintained property tends to attract better tenants than a poorly maintained one.  The next thing to consider is the price.  Price is important when it comes to buying anything, but an investor really needs to understand how the price of an investment property relates to cash flow.  Investors use many methods to value investment property.  An old rule of thumb is to take monthly rent and multiply it by 100 or 110 to determine a value.  It is a very basic formula and doesn’t work every time.  But it is a good place to start for a new investor.   Basically, you need to make sure that the investment is not going to lose money.  Be sure to take into account all the expenses along with the mortgage payment.  Many times new investors forget about maintenance or other costs outside of  property taxes and the mortgage.  Lastly, you should have a plan or time frame in mind for the investment.  For example, do you want to pay off the property?  Do you want to hold and sell later, or take advantage of depreciation and cash flow for a number of years?  There are numerous reasons people invest in real estate, but be sure you understand your goal and purpose of investing.

Yes, there are many factors to consider when investing in real estate, but it should not be viewed as a scary endeavor.  It seems most people don’t invest because they worry about an unexpected cost or the maintenance of a property.  This is somewhat understandable because maintenance can be a costly item from time to time.  Nevertheless, if a property is well located, and purchased right with a time frame in mind the advantages will greatly out weigh any risks.

If you have any questions or real estate needs, please don’t hesitate to contact me or visit my real estate brokerage firm, 5 Market Realty.

Home Buying Process: Part 1 Finding an Agent

Part 1:  Finding an Agent

The first thing to do when buying a property is to find a well-qualified real estate expert to help you with the process.  It is always fun to look for houses on the IPad or smart phone, and really it is ok to go ahead and do that when you decide to buy.  But do not set foot in a house or property until you have found a good realtor to help you. If you are buying in an area that you currently live than you probably already know a good deal about your town.  But a good realtor will know a lot more and be able to assist you throughout the entire process.  If you are moving out of town than it is imperative that you locate a professional in the area you are buying.  The last thing you want to do is waste time looking at properties in an area that you should not be buying.  Or you could end up buying the wrong house in the wrong location.  Home-Buying-101An expert in the area can really help you locate the right property for your family and lifestyle.  But locating a house is just the beginning. A good realtor should be able to provide real value during the entire process.  For example, negotiating, inspecting, financing, and creating the contract.  You can find a good person by searching the internet, making a few phones calls or even meeting with a few different agents.  Now that you know you need help it is important to understand what to look for in a good real estate person.

First, please understand that sometimes less is more.  The agent that sells the most may not be the best fit for you.  Top sellers usually employ a team of agents and they focus primarily on volume.  Top producers are good agents but they may not have a lot of knowledge in some markets.  For example, if an agent sells 200 homes a year spread out over 4 counties it would be almost impossible for that agent to have expert knowledge in all of those areas.   Second, you need to find someone that earns a living selling real estate and works full time in the business.  There are some part time agents that work very well in their market. But you probably wouldn’t hire an attorney that practiced law as a side business.  Would you go to a doctor that that mainly worked as a landscaper and practiced medicine part time?  NO! So why on earth would you buy a house or investment property from someone who “dabbles” in real estate?  It is impossible to be good at something by going half way.  Real estate is a profession just like law, medicine, or finance.  So you need to find a professional and not a part timer.

Lastly, find a person that knows the area you are looking to buy.  The best agent in Atlanta, GA is just about the worst agent in town when they come to Athens to sell a property.  Real estate is a local business that involves high level local knowledge and high level service.  You cannot get either from someone that doesn’t live and work in the area you are buying.  If you keep these three things in mind when looking for a realtor you will likely find a good professional to work with you through the entire process.

In closing, you need to understand that you need help.  It doesn’t matter how smart you are or how much HGTV you have watched.  If you want the process to run smoothly you need a good realtor.  If you have any questions or need help in the Athens area just email or call.

If you have any questions or real estate needs, please don’t hesitate to contact me or visit my real estate brokerage firm, 5 Market Realty.

Welcome Back Students and Thank You

In Athens, August marks the return of the student population.  I have lived and worked in Athens for 16 years and one thing has always bothered me regarding our student population.   I don’t think they are too loud.  I don’t think they drink

UGA Students Cheer on the Dawgs

too much, and I don’t think they are a nuisance.  But I do think people here in Athens do not appreciate our students as much as they should.  Athens, GA is known as one of the nation’s best college towns.  It has made numerous top 10 lists through the years claiming it to be true.  Depending on who you talk to this can be perceived as a negative or a positive.  The reality is that most college towns have a lot to offer residents because of the university.  There are some great college towns that would still be great areas without a major university like an Austin, TX but Athens, GA is not one of those places.  As great as Athens is without UGA it would likely be a small railroad intersection about 20 miles Southeast of I-85.  Fortunately, that is not the case because UGA is located in Athens.

It is not uncommon to hear an adult Athens resident complain about the students. For example, some people complain about the traffic, the amount of bars downtown, and of course the hated fraternities just to name a few.  These common complaints have always bothered me and they seem to bother me more and more as I get older.  Granted people between the ages of 18 and 22 aren’t known for making wise decisions but they sure bring a great energy to our town.   First of all, the university is far and away our biggest employer.  UGA brings many visitors to Athens all year long and every fall it provides Athens with a new batch of students that are going to love Athens for the rest of their life. What other Georgia town has such a strong engine fueling its community? Thanks to the university Athens has a major government employer, a strong economic base, and a culture rarely found in a small town.

I think the students are one of the best things going in our community and welcome them every year.  Thanks to our university Athens remains a wonderful place to live, start a business, or invest in real estate.  We have wonderful neighborhoods, strong outlying communities, and a steady pool of renters that need affordable housing.  This helps make the Athens area a great place to live, retire, or invest.  So in closing, I want to thank all the college kids that live in Athens year in and year out.  I am so glad you are back because without you Athens just wouldn’t be Athens.

If you have any questions or real estate needs, please don’t hesitate to contact me or visit my real estate brokerage firm, 5 Market Realty.

Location, Location, Location!

Most everyone has heard that the three most important things when it comes to real estate are location, location, location. In reality it is true, true, true. We all understand that real estate in Beverly Hills or Manhattan is generally worth athensdtmore than real estate in Nebraska. But this principle usually applies to even the smallest cities or towns. In the Athens area location and school district directly affect the value and desirability of a residential property. For example, the two strongest residential markets in Athens-Clarke County are the 5 Points Area and the Normaltown/Boulevard Area. Both of these neighborhoods are close to many in town amenities, the university, and are located in strong elementary school zones. In 5 Points we are seeing values above $200 per sq. foot and in Normaltown values are around $170 per sq foot in some areas. There are many factors that can contribute to value but most can be traced back to location

For example, the Watkinsville area has some of the best schools in the state and it is in close proximity to Athens, GA. This creates a strong residential market in Oconee County and makes it desirable. The land can be purchased cheaper and therefore buyers can see a value to living in that area because they can have more house for less money. So if the schools are strong and the location is good why can someone buy more house for less money? Because land is more abundant in that area. The availability of land is directly correlated to the location. There is just not as much land to build or own in Clarke County as there is in Oconee. For example, a condo in the heart of Downtown Athens will be worth more than one located on Epps Bridge because in the downtown location land is scarce. Basically, it comes down to supply and demand. With little supply demand can grow.

Real Estate values are returning in our area and confidence is up with consumers. It is not likely that the market will crash like it did in 2008 but the reality is that trees do not grow to the sky. At some point, the local market will have to slow. It doesn’t mean it will fall but it will not grow to infinity. The best thing to do is to be aware of all the factors in location when buying a property. Make sure the location has a value and will remain valuable in good times and bad. Please understand that popular interior features are always changing when it comes to real estate. There is no way to know what will be the hot new look of a kitchen in 15 years but one can make a reasonable prediction on what locations will still have a high value. In closing, a well located property will sell in a good market or a bad market. So always make location the TOP priority when purchasing a property. Do not get too wrapped up in granite, tile, or other interior features interior. Remember location always wins.

If you have any questions or real estate needs, please don’t hesitate to contact me or visit my real estate brokerage firm, 5 Market Realty.