Real Estate 101

Jacksonville, FL Holds Opportunity for Real Estate Investors

Why Jacksonville is One of the Best Florida Cities for the Real Estate Investment Market

Considered one of Florida’s hottest real estate markets, Jacksonville is a popular city for real estate investors seeking investment opportunities.

Located in the northeastern part of the state, Jacksonville is often overshadowed by some of Florida’s more popular destinations, but its diverse economy and geography make it a top spot for real estate investors.

Jacksonville is the largest U.S. city by landmass. It spreads across seven counties, boasts more than 1.2 million residents, and is quickly emerging as one of Florida’s top new tourist destinations. The city is also home to numerous beaches and world-class golf courses as well as several military bases and an international trade seaport. Beyond warm weather, sunshine, and the ocean breeze, Florida is a popular location for investors because it’s one of the few states that doesn’t impose an income tax. Because of this, Jacksonville has grown into a business-friendly environment with strong healthcare and thriving bioscience sectors. These are just a few of the reasons why Jacksonville is consistently ranked as one of the best cities for real estate investors.

Jacksonville’s real estate market is no longer the best-kept secret in housing affordability – especially considering the growth the city is experiencing.

The city was recently ranked first in the nation in housing price growth over the last year, yet it remains one of the most affordable cities in the country. Jacksonville is positioned to continue to experience increases in housing prices and demand.

The Jacksonville real estate market has remained a bit under-the-radar in the nationwide spectrum. That means real estate investors still have a chance to get in on the ground floor as it pertains to home value when purchasing rentals or starting fix and flip investments. Likewise, while record-low mortgage rates are driving homebuyers to the market, this city is on par with the national trend when it comes to tight real estate inventory — increasing the need for new construction homes in Jacksonville, Florida.

There’s never been a better time for investors to snatch up investment property in Jacksonville, FL.

How is the State of the Real Estate Market in Jacksonville, Florida?

Jacksonville has one of the country’s highest-performing economies, and its low unemployment rate is a testament to the strength of the job market.

Florida was quicker to loosen COVID-19 restrictions, which allowed businesses to return to full operating status and allowed the area's popular tourist attractions to resume pre-pandemic norms, which helped fuel economic recovery for cities across the state – including Jacksonville.

Single-Family Homes Are In High Demand

The Jacksonville real estate market is the hottest it’s ever been, according to the Florida Times-Union. Decreasing inventory combined with increasing demand is expected to drive housing and real estate prices even higher in Jacksonville through 2021.

Over the past year, Jacksonville has seen an impressive increase in single-family (SFR) construction permits, and now nearly 60% of home distribution in the Jacksonville area is single-family homes. As in many other cities across the country, suburban housing has the greatest demand.

Jacksonville’s median home prices are well below the national average. Despite the low supply, current real estate prices make it affordable for potential homebuyers to purchase property as well as for real estate investors to buy. This is an important factor at a time when affordability is a major concern elsewhere in the country. 

Rental Investment Opportunities Are Strong

Jacksonville has been ranked as one of the best places to buy rental property in 2021. Real estate investors looking for cash flow and equity growth over the long-term should benefit by owning rental housing in Jacksonville due to the area’s strong job and population growth, and its affordability.

Jacksonville’s rent rolls have improved substantially over the past.

• • The average monthly rent has increased 16% in Jacksonville, FL - from a monthly average of $1,029 to $1,195.
  • Rental occupancy has also increased over the past year from 94% to 95%.
  • As a result, Jacksonville’s percentage of renters is 44% - coming in above the national average of 38%.

Jacksonville's unemployment rate is strong, which should lead to fewer housing vacancies or defaults even after rental moratoriums expire.

New Construction Is Paving the Way

In the past year, Jacksonville’s single-family permits for new construction homes increased 35%, while multifamily permits increased 234%. When combining both, overall housing permits have increased 63% YOY – the largest increase of any major metro in Florida – making the Jacksonville market the fastest-growing housing construction metro in Florida. The increase in construction permits indicates that real estate investors are looking for new opportunities to add to their portfolios by building rental homes in the Jacksonville area. Enter build to rent.

Build to rent is one of the best housing investments right now. Build to rent isn’t a new concept. It’s been a staple of the real estate market for a while in the form of small multifamily properties like duplexes and triplexes. Now, the concept of building to rent is being used for single-family homes and SFR developments. Build to rent is ranked as the top real estate investment recommendation by experts across the U.S., and companies are jumping on the opportunity to construct build to rent properties in Jacksonville.

The single-family rental market continues to boom. The growth started when the SFR market first emerged during the Great Recession of 2008 — referred to then as Foreclosure-to-Rental. But when home prices recovered, real estate investors who wanted to start or continue growing their investment portfolios had trouble finding deals that penciled out. One solution they found was in building rental homes and entire communities of new homes. The build to rent boom was born. For example, Middleburg Communities, based in Virginia, announced last fall plans to launch The Hamlet – a community of newly built for rent homes – in several southeast markets including Jacksonville.

The Booming Economy in Jacksonville

Jacksonville, Florida is among the nation’s fastest-growing cities, according to a recent report from the Jacksonville Business Journal. The city ranked 25th among the fastest-growing cities in the U.S. – adding nearly 60,000 residents over the past five years.

Aiding in that growth are the numerous development projects in Jacksonville’s future – including projects slated to bring residential units, hotels, restaurants, and retail space to the city’s downtown area.

Development Projects in Jacksonville

Jacksonville developer Steve Atkins announced in June his plans to lead a nearly $1.1 billion redevelopment of mostly city-owned property, including the former Jacksonville Landing. The total development will have 2.3 million square feet of programmable space including exterior facilities with a $559 million private investment. The Jacksonville Jaguars are also getting in on the downtown development action with a multi-faceted project that will feature a Four Seasons Hotel, office space, an orthopedic sports medicine complex, and improvements to the surrounding city-owned marina.

"My goal is for Downtown Jacksonville to be the envy of cities here in the U.S. and elsewhere, and I see no reason why we can't achieve that goal," said Jaguars team owner Shad Khan. "I am confident we have the local leadership, spirit, and commitment to revitalize downtown Jacksonville in a manner that will make the world take notice while also serving the needs of the community and the people who make Jacksonville their home."

Jacksonville's Economic and Population Growth

Experts expect the city to continue that growth pattern for the next decade. Jacksonville is expected to add more than 800,000 new residents over the next 10 years as well as more than double the metro population over 25 years. As Jacksonville’s population grows, the city’s job market is growing as well – an attractive point for real estate investors. Jacksonville is projected to have 14% more job opportunities in the next 10 years, double the growth rate projected nationwide.

One of Jacksonville's strongest indicators right now is its unemployment rate, which is hovering around 4% - coming in 2 percentage points lower than the national average. Jacksonville’s healthy unemployment rate is a great indicator of the city’s job market. Historically, Jacksonville has managed to match or outpace the national unemployment rate, undoubtedly due to its diverse economic infrastructure.

• • Forbes ranked Jacksonville as one of the top U.S. cities for job growth because of its business-friendly and pro-development policies.
  • Jacksonville is home to several well-known companies including Firehouse Subs, CSX Transportation, and Stein Mart.
  • New Jersey-based Dun & Bradstreet announced in May it would move its global headquarters to Jacksonville. The move is expected to bring 500 jobs to the city over a five-year span with an average salary of $77,000.
  • An unidentified financial technology company, code-named Project End Game, has proposed moving its headquarters to Jacksonville and is seeking $4.5 million in city and state grants. If the company expands into Jacksonville, the move will create 673 full-time jobs by year-end 2024 at an average wage of $97,000.

Harnessing Investment Opportunities in Jacksonville's Thriving Real Estate Market for Investors

Jacksonville, Florida has one of the top real estate markets in the country right now for investors. The city is a prime investment opportunity with the largest opportunities for real estate investors being in single-family rentals, fix and flip properties and ground-up new construction.

Being the largest city in the Sunshine State and the whole continental U.S., Jacksonville holds a lot of promise for those willing to invest their money into the city. There’s no doubt that now is the best time to invest in Jacksonville. With affordable prices and countless tax benefits, investing in Jacksonville, FL means being part of its rapid development, and consequently, getting high returns on investments. All in all, Jacksonville is a great place to invest in and to own real estate.

New Construction Loans in Jacksonville, FL

For investors looking to build income properties and rental homes in Jacksonville, Lima One’s new construction loans give investors the freedom to add ground-up construction and newly built homes to their investment portfolios.

While inventory might be harder to find, investors with strong real estate investment strategies can still profit. It’s now more important than ever to have a lender capable of helping you:

• Secure a loan with the best price and maximum leverage for your next rental investment
• Close properties quickly and certainly
• Run your construction or rehab projects smoothly

If you’re interested in obtaining construction loans in Florida or real estate investment loans in Florida, contact us to learn more. We are experts in financing new home construction for builders on urban in-fill, spec homes, model homes, and teardown/rebuild projects. Lima One's team of experienced professionals will help guide you through getting a new construction loan for your investment property in Jacksonville.

Get started today and scale your rental property portfolio with Lima One, the nation’s premier lender for real estate investors.

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