Advice in the Jacksonville Area

[Ashleigh Evans]

Hey BP!

I just moved to the Jacksonville area (military), and I'm looking for my second private residence that I will rent out in 2 years. I'm working with a realtor, and it just doesn't feel like I'll find a wise investment.

Jacksonville (especially in the beaches area, near the naval bases) isn't an area where people take care of their homes, so the amount you pay for a house that's really going to need a lot of work is astronomical.

Any advice? Alternatives to realtors maybe? Lessons learned? 

[Mark McClure]

Hi Ashleigh,

I am a Realtor® in Connecticut and am getting my reciprocal license in Florida this summer planning on moving to the Jacksonville area in the fall. Why do you think the beach area homes are not taken care of? Is it the weather, the residents, the quality of the builds or a combination of all the above? What areas do you see as up and coming? Any input would be appreciated. 

[Account Closed]

Ashleigh

I think you might be speaking of an area we call Mayport which is close to the naval base and you're right that's not a really good area but there's other areas very close to Mayport Naval Base that have very nice homes I think you might just need to spread out your search a little more

[Account Closed]

Mark, what area of Jacksonville are you looking to move in the fall?

[Kurt Stein]

The beaches areas are great (Atlantic, Neptune, and Jax Beach) although relatively expensive at the moment, especially as inventories are low. I do agree that the Mayport area near the military base is less desirable, although it does seem like some investors are going in there and flipping some homes and building new construction. It's tough to say where the best return on investment will be but if you know the area well you can spot a good investment here and there, but they're becoming fewer and further between. With prices so high, I think flipping might provide the best returns right now. It's tough to find a good buy and hold investment right now out at the beaches, unless rents increase substantially or you get lucky with appreciation.

[Dionne Brunson]

Hi @Ashleigh Evans,

@Account Closed is right. Have you visited the area in person yet? 

Your search parameters could also affect the inventory outcome. 

[Ashleigh Evans]

I live here now, so I can get out and walk to find new inventory every day. 

The beaches (Neptune, Atlantic, Jax) can be nice, but you can easily pay $400K for a 1960s bungalow there that hasn't been touched since. The value of land is so high on the beaches that your fixer uppers start in the 200Ks. 

Now - and the realtors can correct me if I'm wrong - interest rates are on the verge of increasing here, so everyone is buying a house before the interest rate increase. Those 200K properties have multiple bids on them in matter of hours. If a house goes on the market at 7, it usually has 3 offers on it by 10-11. 

Keep in mind these 200-300K houses are 1960s beach bungalows that haven't been touched since. They need an abundance of work - I'd say around 20K average. 

Personal opinion-

Residentially, with the exception of the houses on the block next to the beach (the 1.5M ones), the beaches have been riding on the fact that they're next to the beach. People haven't invested in their properties, buying homes around 2008 riding out the appreciation since the market crash. You don't get what you pay for. 

[Chris Hughes]

I own some property in the riverside/Avondale area.  That part of the city has absolutely exploded in terms of desirability and prices.  2 years ago was about the last time to purchase down there for anything resembling a reasonable price.  Even fixer-uppers are starting to go for a price that doesn't make them desirable for the average investor/flipper.  The beaches, as everyone has already pointed out, are also at a 10-year high right now and inventory is low.  Properties are commanding a premium.  Taxes and insurance in Jacksonville, Neptune, and Atlantic beach are also considerably higher than the rest of Jacksonville proper so keep that in mind.  

The areas I would look in personally for investment opportunities are Springfield, Murray Hill, and Arlington.  Springfield and Murray Hill is where everyone from Riverside/Avondale have moved to because of the almost doubled rent prices there over the past couple years.  But, it may take you some time to recoup and investment there as it is still 2-3 years out (in my opinion) for those areas to be gentrified to a point that makes them desirable.  The city of Jacksonville has some big revitalization plans for Arlington so I would look around that area too.  Also, now that Khan's downtown plan has official city approval, and funding is being worked out, I would keep my eye on investment opportunities in the downtown area over the next 3-5 years.

[Chris Hughes]

Worth noting however... I don't see prices going down any time soon in Jacksonville and the surrounding areas.  Big corporations are increasingly moving parts of their operations here and Jacksonville is continuing to grow rapidly.  Inventory is relatively low and many sales happen before a house reaches the market.  It may be a situation where if you want into the market, bite the bullet and pay the price.  If you're looking for something as a pure investment and don't mind waiting a few years to recoup anything you put into it, then look at the areas I mentioned above.  Or perhaps look north to Nassau or south to St Johns county.  There are still opportunities there's but those areas are being developed rapidly as well.  

I see Jacksonville as being on the precipice of a "golden age".  We have the same pieces of the puzzle that Charlotte had 10-15 years ago and Denver had 10 years ago. And look where they are now.  It will be up to our elected officials, city planners, and investor businessmen to make the pieces fit together properly.  

[Dionne Brunson]

Hi @Ashleigh Evans,

You're 100% correct. Not only is inventory low but houses are going fast. Buyers have been missing out. However, there are still properties out there that I think are worth looking at. I have a listing right now in the BP marketplace for a Jax Beach duplex at $400k. So, you're right that the price is high but it's also a duplex that could be used for regular rentals or vacation rental. It's not in the marketplace (now I may add it) but there's a prop that just became available at $117 with very little rehab needed and can get $800-$950 per month. The stuff it out there you have to be fast and ready to go when it comes up.