Jacksonville and the area beaches have experienced exponential growth over the last couple of years – opening up new opportunities for investors looking to diversify their portfolio with a property used for short-term rentals. The Jacksonville Beaches have become a popular destination for tourists looking to visit a different Florida destination that still offers, beaches, restaurants, and plenty to do year-round.
With the growth that Jacksonville has experienced, the potential return on investment in short-term rentals presents a lucrative opportunity. These short-term rentals often command higher nightly rates compared to traditional long-term leases, allowing investors to maximize their returns. They come with a lot of flexibility to adjust rental rates dependent on market demand and seasonality providing an advantage to owners when demand is high to get more for each night that the property is rented.
The rise of platforms like Airbnb and VRBO makes reaching a global audience so much more accessible. This greatly expands the pool of potential renters. And, best of all, with a short-term rental, the investors can have the flexibility to use the property for personal use during periods of lower demand – it’s not just an investment, it’s an excuse to take a vacation! This could also open up additional financing options.
All of that being said, here are things that you need to consider before investing in Jacksonville Beach real estate:
- Location, Location, Location
There are a few different reasons why location is at the top of this list. To begin, you want your rental to be in an ideal location for visitors – think walking distance to the beach or proximity to restaurants. Those things will attract short-term rentals who want to ensure they are in a prime location for their visit.
Secondly, you also have to consider budget and value. East of A1A, the three blocks closest to the beach, is highly valued and that value is reflected in the higher average price compared to a property west of A1A. If you choose a property west of A1A, you can probably get more square footage for your budget.
Aside from the beaches, San Marco, Riverside, Avondale and Springfield are all other areas of Jacksonville that Nomad Realty suggests investors focus their attention for short-term rental options.
- City Regulations
It’s important to look into the city regulations if you are considering a short-term rental. Jacksonville Beach’s city regulations are very investor friendly, requiring you to register your property with the city as a ‘vacation rental’ and soon after, you can a begin your rental business. Just be sure you are not looking in a homeowners or condo association that restricts short term rentals. If you are looking outside of the Jax Beach area, be aware that the neighboring beach towns, Atlantic Beach and Neptune Beach have more city-wide restrictions in place against short-term rentals.
- Market Trends:
According to Nomad Realty CEO Rich Stancato, “Overall property values in Jacksonville Beach remain high in comparison to other areas of Jacksonville. They are expected to continue to rise as interest rates begin to trend downward over the course of 2024.” Because of the expected increase in property values, waiting for rates to drop isn’t necessarily ideal. “You’ll likely be paying a higher sales price later on in the year and beyond,” explains Rich.
Inventory has been steadily increasing over the past few months but that trend tends to wane as we get closer to the summer months and competition increases.
- Rental Demand:
If you're considering rental properties, understanding the rental demand in the area is crucial. Jacksonville Beach attracts tourists, but it's also home to a growing population. Analyze the rental market to determine the demand for different types of properties, such as vacation rentals, long-term rentals, or multi-family units.
“Short-term rentals are continuing to get more competitive in the Jacksonville area,” says Rich. “Some investors have pivoted back to medium and long-term rentals as a way to normalize cash flow.”
Short-term rentals can very greatly depending on the month and the management of the properties and because of that, medium to long-term rentals can be a solution. With multifamilies, you can also do a mix of property types with one short-term and one long-term rental to help reduce your risk. Rental values in Jacksonville Beach are some of the highest in the area and have very low vacancy rates as the beaches remain a highly sought after area to rent in Jacksonville.
Additionally, it’s important to consider the feasibility of hiring a reliable property management company to handle day-to-day tasks and ensure a smooth investment experience.
Investing in Jacksonville Beach real estate offers exciting prospects, but success requires a well-informed approach. By considering factors such as location, city regulations, market trends and rental demand, you can make strategic decisions that align with your investment objectives. Whether you’re a seasoned investor or a newcomer to real estate, having experts on your side like Nomad Realty can help guide you to add the best properties to your portfolio. If you are considering making an investment, contact Nomad Realty today.
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