Updated: Mar 7, 2021
As an investor and syndicator of multifamily properties in Texas, Georgia, and Florida, I keep a sharp eye on rents and their overall impact on our properties. The election is over, there will be a new president, and we’re still in the middle of a world-wide pandemic. While the economy is struggling and many Americans are out of work, rents in some markets are soaring. Atlanta is one of those markets. As a devotee of statistics and having a huge passion for analyzing data, trends, and numbers, I wanted to find out the reasons why, as learning the reasons behind this huge rent increase makes me a smarter investor.
After all, Blue Lake Capital owns over 740 units in the Atlanta area alone, and our rents have increased by up to a whopping 40%, which represents a $375 per month increase for some of our units. That would be unheard of during regular times, but those numbers are astounding during an ongoing COVID pandemic with record unemployment numbers. Additionally, while many people are now protected from being evicted thanks to the new national eviction moratorium others who are unemployed and unable to pay their rent could be facing eviction in January. So, why is it that some markets have soaring rents while others are struggling?
Atlanta Rents have Surpassed Pre-COVID Levels
Rental rates in Atlanta have surpassed pre-COVID levels, and as a data driven investor, I wanted to understand the reason for that phenomenon. Part of the answer comes down to supply and demand. Where the rental demand is strong and supply is somewhat limited, the rents will go up.
The main reason for the increase in demand for multifamily properties these days: people are leaving New York City in droves, and record numbers of those leaving are moving to Miami and Atlanta. The moves out of New York City started before COVID struck, which has only helped to exacerbate the number of people leaving. However, what is really telling are the rising number of moves out of New York City when comparing 2019 to 2020. In 2019, according to MyMove.com, an online moving resource guide, there were 18,887 people who moved out of New York City. In 2020 the city lost 110,978 people to other states and cities.