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Jacksonville’s Strong Economic Fundamentals & The Potential For Long-Term Growth

By: Gregg Cohen, CEO, JWB Real Estate Companies
May 31, 2019
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Learn more about what makes Jacksonville, FL one of the best markets for rental properties:

Hi, I’m Gregg Cohen. One of the main reasons clients choose JWB is because of our focus on the Jacksonville real estate market, one of the hottest real estate markets in the country.

Listen to what people are saying about Jacksonville:

  • Forbes ranks Jacksonville add the number two city in the United States to invest in housing.
  • Yelp ranks, Jacksonville has the number two city in the u s for business opportunity
  • Business Insider has ranked Jacksonville as the second most popular city in the US where people want to live.

Why does Jacksonville continue to receive national recognition as one of the top real estate markets in the country?

It comes down to two things:

  1. Strong economic fundamentals
  2. Potential for longterm growth.

When a real estate market has low prices and high rents, there is a cashflow opportunity. If you compare home prices and rent prices in Jacksonville to the rest of the country over the last few years, home prices are 20 to 30% less than Jacksonville, but rents are only five to 10% below the national average.

Sweet spot for rent to price ratio

This rent to price ratio is only found in a handful of markets across the country, and this is what allows investors to earn a positive cashflow on the rental property portfolios. Jacksonville really shines when you consider that most other cash flow markets are located in the Midwest or other slow or no growth markets and other cash flow markets.

Investors can get positive cash flow, but they have little chance for property appreciation over the long haul, and that’s a big deal when you put the numbers to it.

What makes Jacksonville different?

Jacksonville has a special combination of strong economic fundamentals plus the potential for longterm growth and appreciation. Take a look at the numbers from 1985 to 2018 and you can see how Jacksonville’s home prices experienced a much higher appreciation on average than other popular cashflow markets in the US and here’s what this means in real dollars and real returns to your portfolio.

Example:

If you purchased a property for $100,000 in 1985 located in Memphis, your property would be worth $224,500 in 2018 if you’d purchase that same property for $100,000 in 1985 in Jacksonville, your property would be worth $311,600. That’s an additional $87,100 worth of return just for buying in the right market!

I use this example to differentiate why JWB clients choose Jacksonville as their market to build the rental property portfolio, but I should also point out that we don’t factor potential appreciation into the return estimates we produce for our clients. We choose not to include potential appreciation and the returns because we want clients to come to us and to this investment model because of the consistent cashflow and to think of potential appreciation as a nice bonus on top.

Want to learn more about investing in rental properties passively? Watch our free webclass and discover the 3 keys that every investor should know before they make their first rental property investment.  If you have any questions or if you would like to speak with a member of our team, please fill out the form or give our office a call at (904) 677-6777.

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