All Forum Posts by: Shawn K Hicks

Up until the last 2 to 3 years, home owners insurance in Gainesville was dirt cheap. For example, an 1,800 square foot home that is 25 to 40 years old with the Roof, HVAC, electrical, plumbing, hot water heater etc in generally good condition, you could expect to pay 850 to 1,500 (1,200 being the sweet spot) annually depending on coverages selected and deductibles. Now, you can raise those figures by 15-20%. Also, many carriers will not cover roof related issues if for example a 3 tab shingle roof is over 15 years old. Some carriers the cut off mark is 10 to 12 years. Some carriers the same goes for hot water heaters & HVAC. They can be working perfectly, but if they're over 15 years old, many carriers will not insure unless they are updated. (Architectural shingles up to 22-23 years old can still pass with an acceptable 4 pt inspection.) 

Insurance on a new construction comparable square footage home though still more affordable, those costs have gone up as well.

@Karla Simmons You bet! Glad to help.

@Karla Simmons Specifically in Gainesville, my impression is the cost of policies are still more affordable in general than Real Estate closer to coastal areas. You can get a new construction home ranging anywhere from 1,500 to 2,500 heated and cooled square footage for 700 to 1k annually with pretty good coverages. For a home over 10 years old, & some additional variable factors, it is within the norm to be more in the 1,200 to 1,500 a year range.

From an investor perspective, in the last couple of years, many insurance carriers have gotten tougher on 3 tab shingle roofs. Though they can last 15 to 22 years, most carriers now will only allow 10 to 15 years old on 3 tab to underwrite a policy. Also, a hot water heater can be working perfectly fine, but if it's over 15 years old, that is also now an issue for many carriers.

I also frequently run into situations where even if in the electrical panels there is cloth wiring over copper, the underwriters are sometimes still paranoid and assume it's cloth over aluminum. One transaction in particular we had to have an electrician strip back the cloth to prove there was copper, then cover in the more traditional synthetic covering.

@Jeff T. Specific to State Farm Insurance in the Gainesville area: My brother in law runs one of the local franchises. If a residential home ranges from new construction to 10 years old, they in the last year had a reduction in their rates either 20 or 25% which makes them a competitive option from a policy cost perspective. Their customer service is top notch, but on older homes, they are not typically competitive on price. Even still, they seem to have a loyal following that will even pay their higher premium costs on older homes.

Hi Jordan, I work the Gainesville market. (Full time since 2003) I'm around 35% investor transactions with the rest being traditional sales. There are several other local Gainesville/Alachua County Realtors on bigger Pockets for you to network with as well. Here is another great investor minded Realtor from our market. @Jenn Barona 

@Ruoxi Xie

I'm curious as to if they're actually renting rooms out of an "upscale" student geared apartment complex? There are a few of those. What they are paying is generally significantly above the student rental market. Now I see it's by no means nice. Wow! Unless I'm missing something, they are grossly overpaying. 

As to the excess supply of student geared condo's, I don't think you need to worry too awful much. In late March of 2020, student housing came to a screeching halt. With low interest rates, the traditional Real Estate market was still on fire here. Student housing however, with only online classes in session this past fall, parents quit purchasing for their kids, & and investors laid off student housing as well. The student condo market is now picking up. It still felt stagnant back in December. Some buyers I'm working with that are purchasing a unit for their son could have gotten a particular 2 bed, 2 bath unit then for around 3k less than what they are under contract for now. They continued to look hoping something they found even more exciting would come on the market. In the last 3 weeks however, the buyer pool reentered the market. Everything they liked either went under contract quickly, or they would have had to pay over the list price with the multiple offer situations. They somewhat got lucky when the unit they had their eye on before that had withdrawn their listing put it back on the market. This time around, the sellers bottom line was 3k higher. I told them what is absolutely the truth: they could pay that price now, or continue to look and would realistically end up paying more. Temporarily, now through mid July, there will likely continue to be a run on student housing. You're going to notice prices trend upwards. Not to say if you're dead set that it's student housing you prefer to pursue you won't be able to find a decent value, but A. the numbers will likely be more appealing for you with lower income housing & B. the student market will be dead in August/September. If student housing is your goal, simply know you'll have more leverage for negotiations on price in August/September, though the trade off is significantly less renter pool.

Will be there. Last night was a good one. Thank you for setting it up!

@Arthur Harris II @Ruoxi Xie

@Jay Ingersoll

As to the numbers being too good to be true, I get where you're coming from. For example, the 4 bedroom student condos can in some cases bring 450-500 a room, but it's not a guarantee to get all four rooms rented. Another common scenario is an owner may offer a discounted rate to get someone to bite on rented the whole unit.

Up until 18 to 24 months ago, I flat out think Gainesville was significantly undervalued. Now the gap is closing. Many local investors will look at what is on our local MLS, and often consider the numbers to be mediocre. Investors from out of our area however, (CA in particular) are downright giddy sometimes when they look at our numbers. I often hear from certain parts of the country the feedback they're having a hard time finding the numbers they want to hit. I even hear in some cases their markets are filled with properties that would have a negative cash flow.

Our market is pretty safe in that outside of this past Covid influenced year, you consistently have demand with the influx of students that need housing, medical professionals, etc.

As to the very best investment opportunities, overall, I have to say the value of whole salers in our market & their role has significantly increased. A well priced investment opportunity listed on the MLS is gone by the time you can drive to the property lol. The last few investment related transactions I've been apart of have been off market.