Jacksonville ‘a gold mine’ for real estate investors
JACKSONVILLE — To achieve financial security by age 30, Adam Wolbarst of New York City is investing his money in the Jacksonville real estate market.
The 24-year-old bought a home — with a tenant in place — on Jacksonville’s Westside in October. Since then, he’s collected just more than $500 per month on the investment and plans to buy another property in April.
Properties such as Wolbarst’s, as well as a projected increase in rental demand, make Jacksonville a desirable market for investors. While the U.S. median sale price of existing family homes was $177,900 in the third quarter of 2010, the median sale price of an existing family home in Jacksonville was $137,000, according to the National Association of Realtors.
To make the market even more attractive, the median gross rent in Jacksonville is $903, compared with a nationwide median gross rent of $842, according to the U.S. Census Bureau.
Jacksonville is one of only a handful of markets that’s a cash-flowing market, which buys and renovates rental properties to be sold to investors. People in Jacksonville don’t know what a gold mine they’re sitting on.
Wolbarst, who works as a district manager for a chain of convenience stores in Manhattan, the Bronx and central Long Island, bought the home through Progress Home Buyers.
“I’m very familiar with the financials of running a business, and I run my life the same way,” Wolbarst said. “It’s about what decisions can I make — how can I make my money go further?”
Wolbarst bought the home for $82,600, with a down payment of $19,284. The property earns $1,220 per month in gross rent, and after paying the mortgage, taxes, insurance and property management and maintenance fees, Wolbarst earns $538 a month, for a return on investment of 33.5 percent.
Good, cash-flowing neighborhoods can be slightly below middle class, where you can feel comfortable as a landlord. Investors, it’s not about where you’d want to live; it’s based on the numbers.
The attractive rental market is stoking investment activity in multifamily housing as well.
There was demand for about 3,700 apartments in Jacksonville during 2010, said Greg Willett, vice president of research and analysis for MPF Research Inc., which tracks apartment markets throughout the U.S., while about 1,000 units were completed, causing occupancy to rise 3.6 percentage points, to about 90 percent.
“Jacksonville is one of those places that, I think, is going to be attractive for investors because where it is right now is so far under its long-term trend,” Willett said. “And you know it’s going to get meaningfully healthy again.”
Willett said most of the multifamily investment activity is in high-end properties. On Dec. 29, Magnolia Village Apartments, a Class A gated community on Bartram Road, sold for $14 million. Atlanta-based Apartment Realty Advisors brokered the deal; in early January, ARA opened an office in Jacksonville.
“Jacksonville is an important market in the state of Florida, in terms of the number of apartments there,” said Marc deBaptiste, a founding principal of the ARA Boca Raton office. “Our buyers want to be in that marketplace, and we decided we’d be better served having someone local there.”
Ray Rodriguez, president of the Real Estate Strategy Center of North Florida Inc., said there is opportunity for short-term investments — paying cash for a house and immediately reselling it for a profit — in the Argyle area, as well as outside the city, in the Trout Run and Paxon areas.
The 24-year-old bought a home — with a tenant in place — on Jacksonville’s Westside in October. Since then, he’s collected just more than $500 per month on the investment and plans to buy another property in April.
Properties such as Wolbarst’s, as well as a projected increase in rental demand, make Jacksonville a desirable market for investors. While the U.S. median sale price of existing family homes was $177,900 in the third quarter of 2010, the median sale price of an existing family home in Jacksonville was $137,000, according to the National Association of Realtors.
To make the market even more attractive, the median gross rent in Jacksonville is $903, compared with a nationwide median gross rent of $842, according to the U.S. Census Bureau.
Jacksonville is one of only a handful of markets that’s a cash-flowing market, which buys and renovates rental properties to be sold to investors. People in Jacksonville don’t know what a gold mine they’re sitting on.
Wolbarst, who works as a district manager for a chain of convenience stores in Manhattan, the Bronx and central Long Island, bought the home through Progress Home Buyers.
“I’m very familiar with the financials of running a business, and I run my life the same way,” Wolbarst said. “It’s about what decisions can I make — how can I make my money go further?”
Wolbarst bought the home for $82,600, with a down payment of $19,284. The property earns $1,220 per month in gross rent, and after paying the mortgage, taxes, insurance and property management and maintenance fees, Wolbarst earns $538 a month, for a return on investment of 33.5 percent.
Good, cash-flowing neighborhoods can be slightly below middle class, where you can feel comfortable as a landlord. Investors, it’s not about where you’d want to live; it’s based on the numbers.
The attractive rental market is stoking investment activity in multifamily housing as well.
There was demand for about 3,700 apartments in Jacksonville during 2010, said Greg Willett, vice president of research and analysis for MPF Research Inc., which tracks apartment markets throughout the U.S., while about 1,000 units were completed, causing occupancy to rise 3.6 percentage points, to about 90 percent.
“Jacksonville is one of those places that, I think, is going to be attractive for investors because where it is right now is so far under its long-term trend,” Willett said. “And you know it’s going to get meaningfully healthy again.”
Willett said most of the multifamily investment activity is in high-end properties. On Dec. 29, Magnolia Village Apartments, a Class A gated community on Bartram Road, sold for $14 million. Atlanta-based Apartment Realty Advisors brokered the deal; in early January, ARA opened an office in Jacksonville.
“Jacksonville is an important market in the state of Florida, in terms of the number of apartments there,” said Marc deBaptiste, a founding principal of the ARA Boca Raton office. “Our buyers want to be in that marketplace, and we decided we’d be better served having someone local there.”
Ray Rodriguez, president of the Real Estate Strategy Center of North Florida Inc., said there is opportunity for short-term investments — paying cash for a house and immediately reselling it for a profit — in the Argyle area, as well as outside the city, in the Trout Run and Paxon areas.
