Is a new apartment building going to help or hurt home values?

Is a new apartment building going to help or hurt home values?

Atlanta, GA · Member since 2014 · 3 posts · 0 votes

Hey y'all! I'm scoping out the neighborhood for my first deal and am wondering about the impact a new mid-rise apartment building will have on the neighborhood. There's also a new condo development that was just announced as well. 

So here's the scoop: The neighborhood is Reynoldstown in Atlanta. I would call the neighborhood a B/C neighborhood. Its in-town atlanta just nearby some more expensive areas (Inman Park, for example). There is a relatively new shopping district adjacent to the neighborhood with a Target, Bed Bath and Beyond, Barnes and Noble, etc. (I shop there myself, actually.) The new development apartment building are on the main road at the edge of the neighborhood. Same with the future condo building development. My general thought is that the neighborhood is/has been on the up-and-up in recent years as new build SFHs have been popping up a lot and there are a decent number of flippers in the area. Is it safe to say that the apartment complex and condo development are going to help this trend continue upward? 

Thanks! 

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  • Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
    10y

    I like the trend of higher density growth for property value inflation. New apartments will likely be class A, at least for several years. if 3/2 SFRs in the area rent for $1200 and the new apartment 2/2s rent for $1100, then the SFR rents should move up.

    If I lived in a $400k house next door, I might not like it, but my value could still be helped if there was continuing increased demand in the area.  

    The risk is that the area becomes depressed and the new apartments become class C in 15 years.  The newer retailers who've moved in have undoubtedly looked hard at the same things, so following their lead should be safe.  They look at population density close by, incomes, growth, and traffic counts.  We should be looking at the same things.  

  • Atlanta, GA · Member since 2014 · 3 posts · 0 votes
    10y

    That makes a lot of sense! Thanks so much for the response!

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