Home to the Georgia Aquarium, Chick-Fil-A College Football Hall of Fame, World of Coca-Cola, Atlanta History Center and Centennial Olympic Park, among many other attractions, Atlanta is a natural tourist destination. Not to mention, several iconic events drew millions of visitors to Atlanta in the past, such as the Olympics and Super Bowls. Atlanta’s tourism is only on the rise, with the anticipation of the 2025 College Football National Championship and the 2026 World Cup.
Vacation rental investors would naturally want to invest in Atlanta. However, the city has some short-term rental regulations to strongly review and consider before purchasing in this market.
Atlanta’s Current Short-Term Rental Market Rules
First voted on in March of 2021 and currently in effect, the complicated Ordinance 20-0-1656 regulates all Atlanta STRs. This ordinance, commonly known as the “City of Atlanta Short-Term Rental Ordinance” outlines various regulations and requirements to manage the operation of short-term rentals in the city.
To own and operate an STR in Atlanta, hosts must be local, obtain licenses annually for a $150 fee, pay an 8% tax rental fee for each property, and are limited to two properties, with one being their primary residence. Further, hosts must be available 24/7 and adhere to noise restrictions and occupancy limits.
Primary Objectives of the City of Atlanta Short-Term Rental Ordinance
While it is quite restrictive, the Atlanta City Council voted 13-2 in favor of the ordinance. Their goals were to:
- Regulate and tax short-term rentals in the city to ensure public safety and the general welfare of individuals and the community.
- Provide a framework for short-term rental licensing, including requirements for short-term rental owners and agents, application processes, and fees.
- Establish rules and guidelines for short-term rental operations, including occupancy limits, noise restrictions, and posting of licenses.
- Address nuisance behavior associated with short-term rentals and enforce penalties for violations.
- To ensure that short-term rentals are subject to applicable state and local taxes, including the hotel-motel tax.
March 2023 Review of Existing Legislation
In response to concerns about the ordinance, in March 2023 Atlanta City Council held a Joint Work Session to Review Short-Term Rental Legislation. According to Fox5Atlanta, there are more than 10,000 short-term rentals in the city, and the City Council is struggling to come up with a solution to make everyone happy. At the hearing, the City Council listened to pleas from residents about the turmoil short-term rentals have caused in their neighborhoods. One resident mentioned he feels like he is living in a hotel. Another discussed the poor upkeep of a home in her neighborhood.
The opposing side says the ordinance hurts small businesses. One woman cried that her livelihood was being taken away.
There are talks to modify the regulations and allow for unlimited rental licenses, yet discussions are still under way.
Should You Buy an Airbnb in Atlanta?
First and foremost, take a closer look at the full list of rules in the City of Atlanta Short Term Rental Ordinance. If you are able to comply with these rules, then consider weighing the other benefits and risks.
Benefits of Buying an STR in Atlanta
- Affordability: The median home price in Atalanta is $395,000, which is below the national median of $422,000.
- Appreciation: Mashvisor found that Atlanta has an average annual appreciation rate of 4.23%, which is significantly more than the Georgia and U.S. averages.
- Tax Benefits: The state of Georgia has a 75% corporate income tax rate, while some states nearly double that number.
Risks Associated with Buying an STR in Atlanta
- Low Occupancy Rate: Rabbu found that the current occupancy rate for short-term rentals in Atlanta is 39%. Anything under 50% is considered low.
- Return on Investment (ROI): Data from Mashvisor indicates that Atlanta Airbnb hosts are currently losing money on their short-term rentals.
- Seller’s Market: Atlanta is currently a Seller’s Market, which may make it tricky to get a good deal.
The Bottom Line
If you are looking to see a fast return on your investment, then now might not be the time to buy a short-term rental in Atlanta. For investors looking to build wealth over time, you could consider Atlanta for your next short-term rental property. Consulting a real estate professional about your unique financial situation is always a good move.
Work with MXM Acquisitions & Investments Group Inc. to Optimize Your STR Investment Strategy
At MXM Acquisitions, we have over two decades of experience in helping real estate investors build successful portfolios. Investors ourselves, we have first-hand expertise on:
- Investment Monitoring
- Building Positive Cash Flow
- Risk Mitigation
- Portfolio Diversification
