The pros on HGTV make it look easy: with an infusion of cash and elbow grease, a once-vacant building is transformed into an attractive and appealing money-making machine. Generating income from assets rented or leased to others provides many investors with predictable cash flow, healthy returns, attractive tax advantages, and asset diversification that can build wealth.
But is a rental property investment really that simple? There are numerous factors to consider before taking this step, and one of the first is to determine the demand for affordable housing in your target area. If you are considering Jacksonville, Florida, you’ll find that it easily meets proven criteria for investment purposes, and an ongoing housing shortage continues to fuel opportunities for property owners.
Jacksonville offers increasing opportunities for property owners every year. Recent Census data indicate that Jacksonville is growing, and has been for the last 20 years, making it the 12th-largest city in the country. The reasons for the city’s growth, including an influx of millennials attracted by a booming job market, remain constant: with a strong economy, beautiful weather, good schools, and plenty of space, Jacksonville offers something for everyone. Its reasonable cost of living—11% less expensive than Orlando and nearly 32% less expensive than Miami—adds to Jacksonville’s appeal as it offers world-class amenities tempered with the unique Floridian way of life.
Pros and cons
In recent years, Jacksonville has experienced the same housing crisis as countless other major cities in the U.S. For lower-income individuals like students, retirees, and young professionals just starting out, a long-term lease may be out of reach. Failing to meet the threshold for rent and lease approval can hinder people from acquiring safe and affordable housing, stymying their hopes for a better, more comfortable, and stable lifestyle.
With urban living costs climbing in cities like Jacksonville, housing options may include crashing with friends or family, low-cost motels, sleeping in a car, or even homelessness. While subsidized housing is an option for some, such as those who rely solely on Social Security or disability, waitlists can leave people in the lurch. That’s why property owners are discovering how providing safe, attractive, and affordable housing makes sense not just for them but also for Jacksonville’s countless renters. Rentcafe.com reports 152,160—or 44%—of the households in Jacksonville are renter-occupied, while 196,649—or 56%—are owner-occupied.
The mounting need for rental property is clear. In the business of providing affordable housing options since 2017, PadSplit professionals have compiled resources to help you determine whether taking that first step toward rental property investment is right for you. PadSplit offers an alternative way to invest in rental property.
Do the math
For most of us, the idea of purchasing property raises uncertainty. A glance at headlines will tell us that the time is ripe for rental property investment. The Jacksonville Daily Record reports that the reasons rents have increased are two-fold:
- A tight housing market keeping would-be buyers from leaving apartments
- Expired rent relief and pandemic eviction moratoriums
These factors grant property owners the opportunity to leverage their assets to ease the affordable housing shortage while reaping profits through renting to others.
Investing in rental real estate is a big commitment. Begin the decision-making process by asking yourself how much you can afford to spend and how much income that investment will generate. Sound complicated? It’s simplified with PadSplit’s earning calculator. They’ve also done the research for you to locate the most promising properties that position you for success. You’ll want to offer renters a safe, well-maintained residence in a stable neighborhood, close to major employers and schools, and with access to transportation hubs. PadSplit has mapped those locales for you.
Decide how to rent it
Today’s rental markets include more options than the traditional single-family residence, but many have drawbacks: PR Newswire reports profit margins on three-bedroom single-family home rentals are declining year-over-year across most of the U.S., including Jacksonville, as rents aren’t rising as quickly as property prices. Short-term home rentals like Airbnb and Vrbo are perfect for temporary lodging during vacation or corporate travel, but unless renters have deep pockets, the costs quickly add up making them a poor solution for residents needing longer tenancy.
During the rental crisis, PadSplit’s business model has proven valuable for property owners, known as Hosts. Investopedia outlines the pros and cons of renting by the room and concludes that under the right conditions, the potential returns on investment far outweigh the risks.
Property owners and renters alike are fond of Airbnb and Vrbo’s streamlined processes but find that handling administrative details can be time-consuming. However, with the likes of PadSplit on the scene, this gap is currently being bridged. PadSplit has developed front-end, rigorous guidelines and procedures that increase rental property investment success. PadSplit acts as the go-between to eliminate much of the hassle of managing residents and dealing with any complaints or inquiries. You can focus on more immediate needs that grow your rental property investment plans while generating passive income.
Making Jacksonville neighborhoods even better
Neighborhood redevelopment is another factor when deciding whether to develop a co-living property. Brittany and Derrick enjoy a robust income generated from their PadSplit units while providing affordable housing to those who need it most. Rental property investment for them has segued away from Airbnb and toward PadSplit’s streamlined business model. As they preserve and bolster the charm of quaint neighborhoods, they’ve built a loose-knit network with other like-minded property owners. Together, they rebuild their residences with the same ethic, resulting in whole neighborhoods being improved which, in turn, helps protect the value of everyone’s investment. It’s a win-win for Hosts and Members—and for Jacksonville.
Brittany and Derrick’s experience in Airbnb ownership and management made them recognize its disadvantages. Income based on short-term reservations is often driven by such variables as holidays and traditional vacation seasons making occupancy and resultant income sporadic at best. The couple had to invest valuable time into cleanup after each tenant’s departure, meaning their family time suffered. And, speaking of time, they had to monitor online queries at all hours and be available to turn over keys and communicate instructions to renters. PadSplit’s model—based on longer occupancy—means Brittany and Derrick now spend less time in costly turnover activities by allowing PadSplit Hosts to handle resident management.
How to invest in rental property
If you don’t already own property to convert into co-living units, but recognize that rental property investment is a viable way to earn income, PadSplit has prepared questions to ask when choosing a real estate agent to purchase a prospective dwelling.
They’ve also made it easy for you to determine the best location for PadSplit properties; it’s just a matter of selecting what’s right for you and your residents. The Jacksonville market has a growing population that needs proximity to major employers and its secondary and graduate educational facilities. Some Members may not own cars, so must live near public transportation to access jobs and amenities. And, of course, safe neighborhoods are essential.
Although PadSplit has done much of the detail work for you, you may still be unsure where to start. If that’s the case, your first step may be to connect with realtors from the PadSplit Vendor Network. They know its model and can help you find the ideal location and property for your investment.
Jacksonville continues to provide opportunities to not only the thousands who stream into the area every year but to the property owners whose mission is to shelter them in safe, affordable housing. Take a moment to discover how PadSplit makes rental property investment such a profitable endeavor and develop a straightforward plan of action as you journey toward financial growth.