Atlanta market for short-term investment property

[Kelly Taylor]

Hello BP members!  I'm new to the site and new to investing and need some advice. I've fallen in love with a small home in the Home Park neighborhood of Atlanta, to be purchased as a short-term rental. This neighborhood is centrally located, close to GA Tech, 10th + 14th St., the very popular Westside, minutes from Buckhead and Midtown, walking distance to some awesome restaurants - in short, I think it'd make a great short-term rental like an Airbnb. 

I've used the BP rental calculator and the long-term rental numbers don't look great but as an Airbnb, it could possibly get double the mortgage amount. There's a lot of unknown with the short-term rental market though and I would need to rent it out at least 15 days a month, so 50% occupancy to break even.  I have the opportunity to buy this home off market which could help to get a better deal, but as a long term rental, the numbers are still a little tight for comfort. Does that mean it's too risky of an investment, or if I can get the property in the range to get 1% on a long term rental, should I make my move? 

If it goes to market it would be listed at $285k, which the comps support, but I could potentially get it for around $255k by cutting commissions and working directly with seller. What do you guys think?? Is the market too hot here? Are you experienced investors waiting to see if prices drop? Thanks in advance for any words of wisdom on the matter.

[Nick Fitzpatrick]

@Kelly Taylor:

I think it all depends on your investing strategy. I've never looked into the local AirBnB market. Does Home Park's proximity to Downtown and Tech give it an advantage over the numerous hotels in the area? Does it beat just renting to Tech students?

$285k seems high for Home Park, especially if it needs some work. Most of the houses have been Tech rentals for years. FMLS has comps around the $250k mark, retail. What am I missing?

Depending on the location, you could just buy it and sell to a builder to tear down.