If you are looking for investment property in the Emory area, do your research!
Condominiums and Townhomes are generally not the best investment vehicle for an Investor.
As an Emory Property Manager, I am often asked to find properties for Investors that are affordable in neighborhoods that are fairly pricey. One of the first requests is to look for Townhomes or Condominiums.
Let me explain why this is not the best investment purchase:
Properties in Townhome and Condominium Communities in Georgia that were built after 1994 are subject to the Property Owner's Association Act, which allows Homeowner Associations to limit the number of rentals allowed in the community. In addition, most earlier-built complexes have modified their original Association Covenants to comply with the Act.
This means that many Homeowner Associations now limit the number of rental properties that are allowed in their community - most are limiting their allowable rentals to 10% of their total properties. Before purchasing in a condo community, you must know what the Homeowner Association rental policy is and if it is currently at capacity. Most condo complexes in the Emory and Decatur neighborhoods are at that level and several have long waiting lists of 2-3 years for existing homeowners to get on the rental list.
How does this benefit Condominium and Townhome Communities?
Primarily, it allows Federal Housing Administration (FHA) financing. FHA financing offers some of the lowest down payments and lowest credit scores - 580 credit for 96.5% loans and 500 credit scores for 90% loans - in the industry. This type of financing allows more individuals to purchase homes in the community and to sell their homes with more favorable financing when the time is right. It may be more difficult to finance a condo or townhome with FHA as their guidelines to be qualified as an FHA community are fairly stringent:
- FHA requires a high concentration of owner-occuped units - 50% or more - they like to see 30-40% or less.
- FHA wants to see a strong Condominium or Townhome Balance Sheet
- The property must be free of any litigation.
The best choice for an Investor would be a single family home or duplex in one of the neighborhoods close to Emory University or Decatur, where there are many properties that are easily rented that do not have rental restrictions.
Atlanta Decatur Homes is a full-service local real estate company serving buyers and sellers in the Emory University and Decatur neighborhoods for over 25 years. We also offer professional Property Management in the Emory area.