Why Jacksonville, Florida?
Miami, New York, and Los Angeles may be great for a night out, but they lack a certain something as real estate investment towns – profitability.
Boring is beautiful in real estate, and Jacksonville is everything the flashy cities aren’t. It’s well-priced, full of jobs, and it’s a highly attractive lifestyle city.
There is no other major city where hard-working families can live along the warm subtropical waters of the Atlantic for under $100,000. For real estate investors there is no better place, as Jacksonville has an abundance of properties that produce nation-leading cash-flow.
However, it takes more than just low price to make a great investment market. The city must be strong in all 5 key market drivers:
- Economic Growth
- Population Growth
- Supply and Demand
Jacksonville rocks at each of these, which is a lot more than we can say for the merely cheap markets. It’s the perfect combination of high cash-flow with enormous equity upside.
Jacksonville is a city with a strong economic past, present, and future, but don’t take our word for it.
Take the word of all the major think tanks, experts, and organizations that have ranked Jacksonville as a top investment city in America. Better yet, take the word of the businesses that have moved to Jacksonville:
What Makes Jacksonville work?
Real estate investors succeed or fail on the fundamentals.
Jacksonville shines in all the fundamentals. Let’s take a look:
Fundamental 1: Affordability
Since the great recession we’ve become accustomed to seeing low home prices, but we’re not accustomed to seeing these kind of prices in highly desirable subtropical coastal areas. It’s unprecedented.
In Jacksonville, we’re investing under $100,000 to purchase and renovate excellent cash-flowing properties. This is a stunning ⅔ of both the replacement cost and the current median price. It’s hard to lose when buying so far below replacement cost. There is much upside.
It won’t stay this affordable forever. Prices went up 15% in 2013 after bottoming out in 2012, and the market is projected to rise by another 5-6% this year.
Luckily, we’re still absorbing the last round of foreclosures (see Fundamental 5: Supply and Demand), so there are still great deals in the foreclosure market, but this won’t continue forever.
Jacksonville is amazingly affordable, but there are cheaper markets out there. The difference between JAX and those other markets is that our town has an economy and a future.
Fundamental 2: Economic Growth
Jacksonville is home to a diversified and growing economy that provides jobs for the future. We have several major economic and job growth centres:
- Military – The Jacksonville region is home to over 30,000 military related jobs
- Logistics Hub – Jacksonville is the logistics hub for the entire Southeast
- Deep Sea Port – JAXPORT provides 65,000 jobs.
- High Tech – Jacksonville is ranked 6th in the nation for high-tech cities.
- Medical – Provider of over 100,000 jobs in Jacksonville
- Aviation – Jacksonville is home to over 100 Aviation Defence contractors
With our favorable tax environment we’re confident about the future, too. Neither Florida, nor the city of Jacksonville has an income tax. And with a low flat corporate tax rate of only 5.5% you can see why Jacksonville will always be attractive to business.
Fundamental 3: Population Growth
Population grew 2.5% in Jacksonville last year – twice the national average. Not many people realize that Jacksonville is the 13th largest city in the entire nation. With our city growing so fast, we will see continued demand.
Population growth is essential for a strong future real estate market. More people = more renters and more buyers.
Fundamental 4: Desirability
Most people choose the warm, green, and sunny city by the ocean over the cold and grey city. Assuming job prospects are the same, people choose lifestyle. This is one of the reasons why the general trend in America is to the south. The traditional northern industrial centres are on the wane, while the south is picking up steam.
When it comes to desirable regions in America, the Florida Coast is top of mind. All across this great state there are world-class beaches, golf resorts, and countless other attractions. Jacksonville is no exception. We’re proud of our mile-upon-mile of pristine beaches, dozens of world class golf courses, and well, pretty much everything else you’d expect in Florida.
Beyond the natural beauty, residents and tourists enjoy a vibrant arts scene nestled amongst our historic neighbourhoods. The city is home to the southeast’s largest modern and contemporary art museum along with the largest urban park system in the United States.
It doesn’t get much better than Jacksonville for lifestyle.
Fundamental 5: Supply and Demand
We know there is strong and growing demand in Jacksonville due to the continued influx of new residents (2.5% annual population growth) but what about the supply? The answer to this question is one of quiet reasons we love Jacksonville.
Starter homes in Jacksonville are currently selling well below replacement cost, so it makes no economic sense to build here right now. It’s been like this for several years here. There have been no new starter homes built for several years. The supply has remained stagnant while demand continually picks up.
With all of the foreclosures from the recession, there has been a supply glut for many years. However, as we sit here in mid-2014 that supply is finally starting to dry up. This is why the market appreciated 15% in 2013 and is forecast to appreciate another 5% in 2014.
Astute investors have been growing wealth by strategically buying into this exact situation for hundreds of years.
We have a perfect supply and demand situation in Jacksonville right now.