JWB believes in transparency and showing investors what is going on in the Jacksonville Real Estate Market during the third quarter (July – September) of 2021. The excellent news for turnkey rental property investors is that things are booming in the JAX real estate market!
In this episode of the Not Your Average Investor Show, Gregg Cohen and Pablo Gonzalez share information that is deemed reliable that the worst real estate issues initiated by the global pandemic should be over. With low-interest rates, positive rent collection numbers, and significant migration of businesses and residents to Northeast Florida, Q3 shows the market is red hot, and now is a terrific time for real estate investing.
The past six months have been terrific. We see a massive opportunity for investors, and rents are going up, too. This is a wonderful real estate market opportunity for you to build out your Jacksonville real estate portfolio.
If you want to own rental properties in a great market with an outstanding property management team, you're in the right place. The next place to begin the conversation is www.ChatWithJWB.com.
We've been doing client-only calls for about a year now. We like to focus on an update, and it's a great connection point with all of our clients. The trust they put into the JWB team is fantastic, and we feel connected to them through this online community. In the NYAI Show, we get to get in touch more frequently, so it's great to have all of these touchpoints and communication opportunities.
What Will We Discuss In Our Jacksonville Real Estate Market Update For Q3?
In today’s episode of the Not Your Average Investor Show, we will discuss the following:
- JWB rent collection, leasing, renewals & evictions update
- Jacksonville real estate market update
- Update on current JWB inventory, sales and est. returns on investment
- JWB's outlook on home price and rent price appreciation over the next 1-3 years
Why Is Property Management So Important?
You can't be a great turnkey rental investor unless you have an excellent property management team in place. The property management relationship makes the difference between the returns you get and the success you have. The way you win in property investing is to buy and hold properties for a complete real estate cycle.
The JWB property management team lives by specific Key Performance Indicators to make our investors successful.
What Are The Real Estate Market Stats We Track At JWB?
For rent collection, JWB collected 98% of rents in 2020 and 2021!!!! Current properties under management — 3705 in 2020 and 4058 in 2021. We show a jump in rental properties under our property management team, and we're pretty proud of that.
During COVID in 2020, people didn't know how rental properties were going to perform. Everyone was scared.
But what we shared on the show very early on, the mentality was that the reason you came to this hard asset class should continue to happen. The theory was that this asset class would perform better and more consistently than other asset classes. Our approach proved to be correct.
We jumped in 2021 to more properties under management because we opened the door to take on outside property management properties where the investors didn't buy the properties from JWB.
We invested in our operations. We invested in SalesForce and moved all of our systems into one massive platform. Our team has done an excellent job working through it all.
What Is The Property Management Metric For The Jacksonville Real Estate Market?
Another metric, the front end of the property management business, is the ability to rent. In 2020, we rented over 1100 homes in one year, which was a record for JWB. That's huge, and it's a wonderful accomplishment for our leasing team.
Through Q2 in 2021, we're already at 672 homes rented. How is this possible? We have a limited supply, and we are in a position of strength.
If you own the asset right now and you're renting them out, there's a housing shortage, and people need a home to live in. The market for real estate investors is excellent for all five profit centers around owning turnkey rental properties.
How Do Other Property Management Companies Compare?
Not all competitors to JWB are showing such great numbers. Gregg said that because most property management companies sign one-year leases, they tend to lose renters more quickly, and their number of rented houses goes down.
We went to self-assisted showings of houses, and that was a boom for JWB and its investors. With the combo of long-term leases and plenty of housing inventory, JWB is in a very good position!
The average lease length in months for JWB was 26.4 months in 2020 and 26.5 in 2021. If you're going to win in real estate investing, you want long-term renters. Other property management companies don't do it because they're not incentivized to do that. We want to continue moving that number up, slowly but surely.
What's The Re-sign Metric For Tenants?
Re-signs of renters is another metric we assess. We have a record-breaking number in 2020 with 887 re-signs, and through Q2 in 2021, we already have 581 re-signs, which is an incredible amount of wealth generation for our clients.
The average duration of a renter staying in the property is 54 months, which is excellent! As for evictions, we're only at 4%, which isn't bad at all. Our current occupancy was 97% in 2020 and 99% in 2021. The renewal rate is impressive, and these numbers are hard to beat!
There are a few metrics Gregg checks daily. The percentage of occupancy and the homes that are available on the rental market. When you are in a position where you only have one week of rental property inventory, it means it's a red-hot Jacksonville real estate market. This type of growth, the number of houses we rent and re-signs for tenants show it's a great time to invest in JAX rental properties.
What About The Evictions Metric?
In 2020, we had an eviction moratorium, so there were no evictions. In 2019, we had 4% evictions, and it's consistent across 2021 at 4% again.
We thought the eviction moratorium would end, but the Biden Administration extended it through October 2021. We will continue to collect rent and not change much. However, the ability to start the eviction process takes time.
We first begin by finding a solution with the residents who have been affected negatively due to COVID. We have a court-approved payment plan that we use at JWB, and we know that using that tool helps the resident tenants and the property owners.
JWB Management does a great job communicating with residents and owners during the eviction process, which is a plus.
As of right now, nothing has changed. Those who have been affected by COVID sign a form so that JWB can begin the eviction process. There are currently 23 residents who have signed the CDC Attestation Form, which serves as temporary protection from eviction, and it's a meager number when you compare it to the 4000+ properties we manage.
The JWB team does its best to work out solutions, like these stipulation agreements, to keep the tenants in the property and keep the investors in cash flow. If we didn't have a heart and find win-win solutions for everyone, we wouldn't be as successful.
Is The JAX Real Estate Market Overheated? Will There Be A Crash?
Let's go to the graph and see the Jacksonville Historical Home Pricing Data. As you can see, housing prices continue to rise, just as it normally does. But this does not mean we have hit a housing bubble at this point in the cycle.
How do you know what a bubble is in this market? You look at the chart and compare what pricing should be and what it is. We know for Jacksonville that the median home projected sales price shows that the average home price appreciation is that market cycles repeat.
We see that from January 2001 to June of 2021, the home prices appreciate the projected median price at the rate. The red line is naturally moving upward. In short, the JAX real estate market is right on target to where it should be.
When you buy at the top of the market, you can still have positive cash flow. You will still make money on your rental property investments when you hold onto the property for a full market cycle of 10 – 20 years.
Interest Rates Were Dropping For The Last 30 Years And Are At Historically Low Rates. If The Interest Rates Start To Go Up, Will The Historical Rates Hold?
Yes. But it's essential to look at the long game. You'll see the average appreciation rate continues to increase.
Supply and demand are primarily affected by population growth, and JAX has that going well now. Plus, the housing supply has not met demand because we all stopped building after the Great Recession. When you see supply and demand numbers out of whack, you'll see good returns, regardless of the interest rates.
People are sensitive to interest rates, but interest rates don't “wag the dog” over a full market cycle.
Are We Going Into A Bubble?
Where is our pricing today versus where the median home sales price should be? That's what we look at for a data point. Over time, we should see slightly lower than 4% appreciation. The home prices will continue to go up over the next year.
We also look at months of inventory, which tells you what will happen in the short run. When inventory is low, prices remain high. Right now, these two data points show outstanding investing opportunities!
What Is The Jacksonville Housing Market Pricing Data?
In June 2020, prices of homes averaged $255,000, and in 2021, they've gone up to $300,000. In June 2020, the inventory of homes on the market was 7400, and in June 2021, they are at 4264.
When you see many months of inventory, you can have a 6-12 months heads up of where the prices for houses will be. We do not expect home prices to go down because the months of inventory metric are way low.
Most people focus on price, but JWB focuses on months of inventory. That is why we are confident that home prices will not go down anytime soon.
What's The Status Of The JWB Inventory?
What you should expect in Q3 and Q4, you'll see a lot of new construction and townhomes. It's an opportunity we have at JWB from time to time.
Townhomes have a lower purchase price. Your low price point for a townhome could be around $180,000, but a detached single-family home is about $200,000 – $275,000. We love them both because both types of properties create positive cash flow.
We know interest rates will go up in the long term, but we've seen them come down starting in June of 2020. When you buy a property of JWB, we show the numbers and how it will affect your cash flow.
With the lending market right now, we see 4% interest rates, which are incredibly low. Per Gregg, “The deal is in the debt right now.” More wealth creation will happen now because interest rates are so low, and we can borrow the debt for 30 years. This is a great thing for clients!
Conventional loans are currently around 3.5% without paying points! If you can make a move now, do it. Look at how much equity you currently have and consider refinancing so you can take that extra cash and purchase another JWB property.
For the investors that closed on properties in the last 60 days, rents have increased. This means you have higher returns because we got higher rents than the investors expected. Our investors are generating wealth due to these higher rents.
Right now is the very best time to buy rental properties. If you're already a JWB client, you can expand your portfolio without having to spend your savings. That's what JWB wants to do for their clients: Create more wealth.
If you're sitting on equity, you can turn that equity into additional investments. It diversifies your portfolio. If you have a 10-year plan to be financially free, you may get there more quickly.
How Do I Find Out More About Investing With JWB?
Contact the JWB team to begin the discussion. If you want to invest in Jacksonville real estate, now is a great time to jump in. Go to www.ChatWithJWB.com and find out how we can help you reach your financial goals.
It hasn't always been easy to show these numbers and shout from the rooftops that now is the best time to invest. But right now, the real estate market update shows positive growth.
If you want to become part of the JWB online community, join us in the JWB Facebook Group at https://www.facebook.com/CashFlowProperties.
You can also go to www.JWBInventory.com to see what properties are currently available. We encourage you to contact the JWB team for a consultation to determine how our turnkey rental properties can deliver positive passive income cash flow.
We hope you enjoyed hearing the positive news about how great it is right now for real estate investing in Northeast Florida. The Jacksonville real estate market continues to grow and JWB is excited to help many investors from around the United States create positive cash flow from the hard asset class of single-family home rentals.
To Your Success,