Jacksonville FL Real Estate Update

Or, just how many condos can we cram into one state?

Apparently there's room for at least one more development.  The Vestcor Cos. just announced plans to break ground on a 2.5 acre develpment in the heart of Mayport village.

All you Navy guys can rub your eyes now... clear out the cobwebs... you read it right - the sleepy little fishing village and home of one of our Navy's largest bases is about to get a major condo development. For those unfamiliar with Mayport, FL, picture a rustic little fishing village inhabited by stereotypical bearded fishermen; Hardworking, leather-skinned, beer-drinking, salty characters you think only exist in the movies. The homes in the village are simple frame homes weathered by the salt air blowing in from the Atlantic Ocean and looming over them in the horizon are some of the grandest battleships, carriers, and destroyers of the US Naval fleet.

But condominiums? Who'd have thought it? And does Florida really need another condo development? Are there buyers? Time will tell I suppose. For now, I'll just sit and watch in awe as the throngs of new arrivals make their way into our growing metropolis - and, of course, will assist them with their new purchases.

Link to the full story: http://www.jacksonville.com/tu-online/stories/072806/bus_4102773.shtml

Okay, maybe that's a little silly. After all, most people probably never thought ANY of landlording was fun and games. That's mainly because we (people in general) tend to talk the longest and loudest about problems, not successes.

Having owned rental properties for a number of years, I'd have to say that FOR THE MOST PART it has been a very rewarding experience. We've had the pleasure of meeting and getting to know some wonderful people who rented from us. We've had the pleasure of turning some into buying customers.

And, up until recently, we've had the wonderful good fortune of having fantastic tenants who kept our properties in good shape and paid the rent on time month after month. I say, until recently because in the past year we've gotten 2 tenants who just don't seem to see the importance of paying on time. They don't even seem to mind paying the late fee. But, as I've explained to them, I'm not in the business of collecting late fees - I'm in the business of collecting rents... on time!

Well, the simple lease agreement we've used for years doesn't quite cut it when you have the problem tenant. And, quite frankly, I just wasn't experienced at having to provide notices of eviction and all the other legal stuff required when tenants don't hold up their end of the bargain. Fortunately we attended a seminar that dealt with all these issues and now have the resources we need to tackle the problems. (Unfortunately we attended the seminar about 2 months after we got these 2 tenants.)

This article is to offer you the source of the resources we've obtained. The attorney that conducted the seminar has an incredible website with more helpful articles and forms than Carter has little pills (yep, you gotta be a baby-boomer to know what that's all about). And it's all FREE. So, if you are a landlord in Florida or are considering becoming one, I'd highly recommend that you visit http://evict.com/ and bookmark it. You'll be soooo glad you did!

Sometimes it seems like I am always writing... while Susan is out selling homes (hey, somebody's got to bring home the bread, eh?) Anyway, what I'm trying to do is to put down in print as much of the information we've garnered through the years as possible so that our customers can access the info that they feel they need. Much of what I put in print, we offer on our website. Some we provide as hand-outs "as needed" by our customers and/or prospects.

To that end, here is a bit of info regarding getting your home prepared to sell so as to obtain TOP DOLLAR on the transaction. The "secret" to making top dollar isn't really a secret at all-- We've been "revealing" it to our clients fo years. But because it involves a lot of discipline and elbow grease, many people decide to cut corners. And that's when the price you could command begins to drop. Please don't be one of those people.

During our years in real estate, we've seen countless examples where well-considered, well-placed investments of time and a little money have dramatically improved the sales price and increased the speed in which a home has sold.

Our goal for our customers is to show you how even minor home improvements can substantially improve the value and marketability of your home. In today's economy, there are no guarantees that you will recoup what you spend to improve the value of your home - all the more reason it's important to pick the right investments.

But even when you don't recoup all the money you invest to upgrade, many improvements can give you an important edge over other homes on the market. And the failure to make some improvements can leave you at a distinct disadvantage as buyers compare your home with the competition. Believe us, we've seen it happen time and again.

Unless your home is in mint condition or you're selling it as a "fixer-upper," there's probably a long list of repair or remodeling projects to consider. These can range from relatively simple jobs,k such as painting a bathroom, to more complex room-additions or remodeling projects.

When considering any home improvement project, you need to ask yourself a couple of questions: Why are you doing it? Is it work that really needs to be done such as a paint job or replacing a leaky roof? Or is it an amenity you'd like that you think might appeal to a potential buyer - a hot tub or home office addition, for example. Will it add value to your home, or have no impact at all? Or will it actually make your home more difficult to sell?

Some investments, like painting and yard work, involve relatively little cash outlay and yet return many times your cost. Other improvements that you think add value have no significant impact. Adding a swimming pool is a good example. Besides the hassles of maintenance, a pool may actually reduce your home's appeal among families with small children because of safety concerns. The bottom line is to spend time thinking about it before you spend a dime doing it. Your real estate agent should be able to help guide you in your decisions. Don't hesitate to ask for their input - it's part of what we do!

Historically, real estate investments are probably the soundest investments anyone can make. I've read that more millionaires made their money in real estate than any other way. But, does that mean every investment is a good one? Are you guaranteed a 15%, 20%, 30% gain on your real estate each and every year? Not hardly! But some of the "newbies" that entered the market in the last year or so seemed to think so.

What makes an investment a bad one? Well, there are a myriad of possibilities including purchasing without a good inspection only to find out the building is full of asbestos, has chemical waste in the basement and is 80% sawdust now that the termites have finished with their family reunion that lasted 5 years.

But even the newest, least savvy investor isn't likely to make that mistake. And, if an agent allowed him to without fair warning, then shame on her/him. But there is one mistake many did make last year. It's one that we cautioned about repeatedly. That is the mistake of purchasing without the financial strength to carry the purchase should the market shift suddenly - and that is exactly what happened.In our area, we had a literal buying frenzy of beaches condo-conversions. Seriously, agents were in the office taking orders so fast that they were getting confused as to what customers had bought which units. The prices were escalating - not daily but hourly. And some investors got caught up in the frenzy without counting the cost.

So they purchased a unit for $ABC with big plans to sell the unit for $XYZ as soon as the construction was complete in one month. The first of the problems came when construction wasn't completed on time. One month became two and then three and then four... no problem, the investor thought, the value just continues to climb - and so it seemed.

But then it happened - 2006 arrived! And with it came a real market shift. And, well... you know the rest. So what is the investor to do? First, hopefully he heeded our caution to "only purchase if you can afford to have it sit empty and/or unsold for awhile - 6 months minimally - and be prepared to unload and cut your losses should the unthinkable occur." I'm basically a very conservative person - Susan says "too conservative" - and I don't like losing money (nope, you won't catch me buying a lottery ticket).

If he didn't heed our caution, it's time to take a good hard look at his situation. He should probably consult his accountant if he is too emotionally invested to think clearly about his situation. While there may be a number of other options, there are 2 that come to mind immediately.

1. Yes, you had hoped to 'flip' the unit, but with several thousand of them vying for a buyer too, perhaps you should consider renting it. "But", you say, "My mortgage is higher than I can get for rent." Well, wouldn't it be better to get what you can to at least off-set the loss while waiting for the market to adjust?

2. Sell it at a loss. You may be able to sell quickly if you price it a little bit low. Wouldn't it be better to take a small loss now than to slowly bleed to death? 

Real estate investing may be a "sure thing" in the long run but not necessarily in the short run. Make your decisions accordingly.

A "relatively new" concept in office space construction in our area is the office condo. The concept is simple and sensical, of course, being that it is better to own than to rent. And yet, still, many if not most businesses will continue to rent their space.

Therein lies a great opportunity for the investor. Rather than purchasing relatively low priced homes and/or residential condos to rent out to people with sometimes questionable credit and poor pay-on-time histories, buy an office condo and rent out to a business who can't afford not to pay their rent?

Beyond the fact that a business is more likely to be a good tenant, a business is only going to be utilizing the space during business hours rather than 24 hours per day... therefore, less wear and tear (at least theoretically). Couple these great factors with the fact that you can charge FAR MORE per square foot for an office condo than for a residential property, the benefits just seem to grow exponentially. It's all about leveraging your capital for the greatest gain.

Now, remember I am an investor too. I own several rental properties and they have been good investments for me and I will continue to purchase more but, like you, I'm always looking for new and better ways to secure my retirement.

Hey, I think I just talked myself into going out and buying one. Anyone want to rent a nice 1800 square foot office in the heart of one of Jacksonville's most desireable locations - it should be ready for occupancy in about 6-8 months. LOL

With the large number of homes available on the market today, there is no reason to jump the gun on the wrong house. Learn all you can to make sure the home your buying doesn't have hidden defects that will end up costing you much more in the long run. When evaluating the advantages and drawbacks of a particular property, be sure you know the difference between acceptable and unacceptable problems.  

Some issues—peeling paint, worn carpeting, ugly wallpaper—are cosmetic and can be easily remedied. In fact, you can use these “problems” during negotiations to lower the asking price—after all, you’ll need to spend money to bring the house up to snuff. Make careful note of what you see that can be used to your advantage. Don’t nit-pick, however—if taken to extremes, you could end up alienating the seller and creating a hostile atmosphere. 

Other problems may be warnings to walk away. Major foundation cracks, evidence of previous water damage, signs of serious dry rot or termite damage, antiquated electrical systems or plumbing—any one of these may be cause to reconsider your interest. Don’t let a house’s positive attributes blind you to very real problems. If you do, the chances are good that you’ll end up spending much more money than you ever expected down the line.

Whether you’re a first-time buyer or an old pro at the real estate game, buying a home can be a daunting process. It’s an emotional time filled with difficult choices—and each decision you make has money riding on it. Finding the right home to meet your needs is hard enough. But knowing how to avoid paying too much for that home, once you’ve found it, is another job entirely.  

As Realtors^® who have helped countless buyers find their dream homes and save money at the same time, we’ve developed a guide to help you avoid the pitfalls inherent in the home-buying process. You can download this guide from our website - no charge and no obligation. We’ll show you not only how to make sure you’ve found the right home, but also how to negotiate a price to your advantage. 

Before you begin shopping, understand that there are two homes out there vying for your interest—the one that meets your needs vs. the one that fulfills your desires. In a perfect world, you’d find a home that satisfies both. But since this isn’t a perfect world, you’re going to find yourself confronted with choices. 

Do you choose the three-bedroom home with room for your family to grow, or the one with the big  back yard and deck that’s perfect for entertaining? Is having a big kitchen more important to you than a few extra rooms? When you start shopping, you’re going to find homes you fall in love with for different reasons.

That’s why you should list the features you want before you start shopping. Break your list into two categories—“Needs” and “Desires”—and prioritize the items you come up with. Understanding what you really need as opposed to what you’d like to have will help you keep your priorities straight as you shop around. We’ve seen people fall in love with a home for the wrong reasons and then regret their purchase when the home fails to meet their needs. 

Don’t let emotion cloud your judgment. Satisfy your needs first. If you find a home that meets your needs and fulfills some of your desires, you’ll be far better off. The important thing is to know the difference before you get caught up in the excitement of the hunt.

A recent topic of concern in our area (and probably throughout the Southeastern United States) is rising rates for home owners insurance. Due to the extensive damage caused by hurricanes the past few years, insurance companies have raised rates considerably.

In fact, just this week state regulators OK'd State Farm's 52.7 percent statewide average rate hike, after State Farm amended an initial request that called for a 71.5 percent hike. Other insurers have already raised their rates and I'm sure most who haven't already are preparing to do so. This becomes a major factor when consumers are determining how much they can afford to spend on a new home - a factor that wasn't that much of a concern even one year ago.

We feel the pain as much as anyone. In fact we feel the pain several times over because in addition to being home owners ourselves, we also own several rental properties and rates for investment properties are even higher than for owner occupied properties. Another way we feel the pain is in our "business". Increased rates translate into consumer wariness towards making a new purchase - reduced activity in the market means a reduction in our incomes.

Now, don't think that I am complaining. That's really not my intention. I'm simply being a realist as I make adjustments within my own budget. That's what I am hoping you, as a potential buyer or seller, are doing as well... simply "counting the costs" and adjusting accordingly. Rather than getting all worked up and alarmed over the increase in rates, I am thankful that insurance is even available. Think about it. Without insurance, a hurricane could literally destroy your life. With insurance (assuming there is no loss of life) it can only destroy your "things" which the insurance will replace.

When I count the costs and consider the options, I will gladly (though reluctantly) pay for the insurance and cut costs elsewhere in my budget to make up the difference...

Now if we could only get our legislators to do the same. But that's a topic for another time.

There was a time in the not-so-distant past when financing the purchase of a home was relatively uncomplicated. You went to your local savings and loan and signed up for a 30-year, fixed-rate mortgage loan.

Those days are gone, probably forever. Today, you have what seems like an endless array of choices, different rates, terms, down payments, fees, etc. (One lender told us there are literally more than 40,000 available loan options on computer database!) So how do you pick the combination that makes the most sense for you?

Having spent many years helping buyers understand the ins and outs of financing a home, we’ve developed a complete guide (available for FREE on our website) to assist you in evaluating which mortgage is best for you. More than any other single factor, choosing the right mortgage will influence whether or not your investment is a good one.  

Let’s say you get a great price on a home, but you end up with a mortgage that has high fees and a high interest rate. You could see the money you saved disappear in a very short time.

Keep in mind that a great mortgage for one person may be terrible for another. Each of us has different circustatnces that determine whether a particular loan is a good deal or not, whether you're just starting out or nearing retirement, how secure your job is, how long you plan to be in the home, etc. We are willing and able to assist you and put you in touch with a highly qualified mortgage lender who will explain all your options. Give us a call for a full report on home loans or with any question whatsoever. It's our pleasure to serve you. 

Selling a home involves many critical and personal decisions. However, one of the most important decisions is the first decision you need to make -- a decision that impacts your entire home sale:  Which real estate agent should you work with?

 Unfortunately, many people make this decision based on the idea that all real estate agents are basically the same. They sign with the first agent to come along, only to realize too late that they should have shopped around.

Start by asking your friends and family for the names of agents they know. Look around your neighborhood for the signs, ads and marketing materials of active agents in the neighborhood. Check the internet for agents who know the value and power of internet marketing. Once you’ve compiled a list of several names, ask questions - lots of questions.

One of the best you can ask before you ever even meet in person is,

 “Could you send me some information about yourself?”

You can often get a good idea of which agents are most professional and most committed by looking at their personal marketing materials, brochures, direct mail, listing presentation book, etc. "Personal" means stuff they developed (or had developed) for themselves - not the stuff they get from their office and/or franchise brokerage.

Call each name on your list and ask them to send out any information they can before you actually meet with them for a listing presentation. When you get the personal brochure or other materials, look them over and determine your initial impression of this person.

Are the materials they presented professional?  Are the materials they presented  unique and personal – or are they materials that their parent company put together for any agent to use?

”If they don’t have the wherewithal to properly market themselves, how will they know how to  market my home?”

Also, keep track of how quickly and efficiently they respond to your request for information. Are they friendly and helpful, or just pushy and hungry for a listing?  Does this seem like someone you’d be interested in talking with? If they aren’t organized and professional enough to respond promptly to your first request to find out more about them, they’ll probably handle potential buyers for your home the same way.  If you like the way they respond to you and are impressed with the information they supply, call them and invite them to make a listing presentation to you.  It’s always a good practice to meet with more than one potential agent before making a final decision -- usually three to five for sellers.  

Just make sure that you don’t meet with more than one from the same company. This could cause internal strife which would be counterproductive in marketing your home.

For 24 other questions you should ask, visit our website.