Buy Now? (Jacksonville, Jacksonville Beach, St. Augustine: sales, real estate, oceanfront)

[songgirl]

My father in law is thinking about buying a few rental properties as a long term investment in the Vilano Beach area. He is wondering if now is the right time to buy.

What do you think? Now or wait? I don't know how much further prices are going to drop from where they are already. Especially given that it is an oceanfront community.

Also, right now Vilano Beach looks like a train wreck with all the demolition and construction going on. But, plans for the new town center there look phenominal, with a dolphin viewing area, improved water playpark, improvements to the pier and various small shops as well as a new Publix all in a kind of retro 50's style that is in keeping with some of the older establishments like the "Magic Bunny Hotel"

I think he is on the right track as far as investing in this area, but is the timing right?

[cricketfan]

Originally Posted by songgirl

My father in law is thinking about buying a few rental properties as a long term investment in the Vilano Beach area. He is wondering if now is the right time to buy.

What do you think? Now or wait? I don't know how much further prices are going to drop from where they are already. Especially given that it is an oceanfront community.

Also, right now Vilano Beach looks like a train wreck with all the demolition and construction going on. But, plans for the new town center there look phenominal, with a dolphin viewing area, improved water playpark, improvements to the pier and various small shops as well as a new Publix all in a kind of retro 50's style that is in keeping with some of the older establishments like the "Magic Bunny Hotel"

I think he is on the right track as far as investing in this area, but is the timing right?

I think it's a crapshoot nowadays trying to guess the best time to jump in and buy into the market. Anytime now is a good time but whether it's the best time no one can say. Having said that, I agree that the Vilano Beach area has a whole lot of potential IMO. As far as investing in the area if it were me I would be considering vacation homes or weekender homes rather than long-term rental properties. People tend to rent long-term where the jobs are and that area IMO appeals mainly to vacationers.

But of all the beaches from Flagler all the way up to Atlantic, Vilano is my favourite, no question. And with all the pending improvements to the area your father-in-law could well be onto something.

[agreatlife]

Your father should talk to an agent and have them pull some comps to see how much the market has decreased in Vilano. I have some friends who live out on Dolphin Point, and they don't think it has decreased much. I don't have access to the St. Augustine MLS, so I don't know myself about that area. I do think it's a great place to have a place.

Some of those areas may not allow renters, so he'll want to also verify that before he buys (assuming SFR here)

[songgirl]

Thanks for the responses. He is considering short-term rental properties. That's great advice. I also will start pulling some comps to see exactly how much the market has down turned in recent months. I just have a feeling about this area and I don't want him to miss the boat. But I have horrible timing so I just wanted to be sure I wasn't giving my father in law a bad idea by advocating he buy now. Thank You again!

[LM1]

Market timing- be it in real estate or stocks- is almost always a failing principle.
The best thing is to establish what you want to buy, when you want to buy it and determine if the price you're paying is reasonable to what you can expect to sell it for in the future (a little Buffettology coming out here ). Let the idiots try to buy at the absolute bottom and sell at the absolute top... They're the ones who allow the rest of us to make money by taking a fundamentally superior outlook.

Now, on the issue of that particular area... Fundamentally, I absolutely love it- the catch is, so do you and everyone else. It has every single thing going for it and because of that, prices on Porpoise Point haven't decreased much, if at all. That is a highly, highly desirable upper-income area that is extremely stable. Everyone knew that it "was coming", back when they built the new bridge and made Porpoise Point into a little "pocket" rather than a traffic artery- back when there was still a trailer park on Vilano Road. Most of the speculative money in there is in the form of development, not SFD speculation. The people who own those houses also live in them and the ones who don't are building bigger and better things. Now, if you are talking about North Vilano beach, the condo prices there have come down quite a bit...

Maybe if you were a bit more specific as to what he's looking to buy and what price range he's targeting- also, where in Vilano? The Point? South Vilano? North Vilano? Oceanside? ICW side? You aren't going to find anything "cheap" in Vilano, but it's possible that a few deals could occur in the short term, particularly with the interior houses on the inter coastal side heading northward.

[songgirl]

Originally Posted by LM1

Market timing- be it in real estate or stocks- is almost always a failing principle.
The best thing is to establish what you want to buy, when you want to buy it and determine if the price you're paying is reasonable to what you can expect to sell it for in the future (a little Buffettology coming out here ). Let the idiots try to buy at the absolute bottom and sell at the absolute top... They're the ones who allow the rest of us to make money by taking a fundamentally superior outlook.

Now, on the issue of that particular area... Fundamentally, I absolutely love it- the catch is, so do you and everyone else. It has every single thing going for it and because of that, prices on Porpoise Point haven't decreased much, if at all. That is a highly, highly desirable upper-income area that is extremely stable. Everyone knew that it "was coming", back when they built the new bridge and made Porpoise Point into a little "pocket" rather than a traffic artery- back when there was still a trailer park on Vilano Road. Most of the speculative money in there is in the form of development, not SFD speculation. The people who own those houses also live in them and the ones who don't are building bigger and better things. Now, if you are talking about North Vilano beach, the condo prices there have come down quite a bit...

Maybe if you were a bit more specific as to what he's looking to buy and what price range he's targeting- also, where in Vilano? The Point? South Vilano? North Vilano? Oceanside? ICW side? You aren't going to find anything "cheap" in Vilano, but it's possible that a few deals could occur in the short term, particularly with the interior houses on the inter coastal side heading northward.

Thanks for the insight. That's exactly what I'm looking for. I totally agree that Vilano has always been a desireable area, so there are no really fantastic deals to be had now or in the near future. But, stability is key and I think that's a given. As a long-term investment I feel it's pretty rock solid. Also, I do think that given the redevelopment plans, it will become a more desirable place making shot-term rentals more lucrative.

As to where to buy within the area, I'm not so sure. Like you said, the prices HAVE fallen off some in North Vilano so we are looking there. At the Point, there are a few properties that could work and this area is tempting because everything would be in walking distance.

Not sure of the price range or even what type of property to focus on yet. My father in law lives in Korea and is coming here to visit in May. He would like my husband and I to do some leg work before he comes. We never really know what he is looking for. He's a tough guy to work for

All doors are open right now. I do know he is interested in a property that family members can use on vacations and rent out the rest of the time.

So if anyone has any more advice, let me know. Thanks!

[AliceT]

Be very careful. The advice so far is accurate, but also consider the fragile nature of the American economy. If you intend to have a few rental places, that's all fine and good during a strong economy, but a disaster if you are left holding the mortgage in the event of another economic collapse to make the Great Depression look like a weekend holiday. That could also happen if/when the avian bird flu should hit the mainland and if someone in your rental building contracts it, you could be looking at serious shortcomings. You can't evict renters for non-payment if the building is under quarantine.

Just a little something to think about.

[David in JAX]

The beach areas in Jacksonville (actually across all areas of NE Florida) are going through a rental recession right now. I would be very surprised is Vilano Beach wasn't having the same problem. I would suggest checking the vacancy rate and vacancy rate trends in that area. If the vacancy rate for the area is high, your father-in-law may not be able to rent out his units/homes at any price and would quickly see a huge problem in his long term investment. This is happening in Jacksonville Beach right now where there are so many waterfront condos on the market people are unable to rent them out to qualified renters at any price. But, if the vacancy rate is low, then Vilano Beach would be worth checking out.

As everyone is saying, it's nearly impossible to time an exact peak or trough in RE or any other investment. But remember this, Florida has just entered the first phase of a long term RE recession after its biggest bull market in history. So, it would be wise to take in the RE gains in the area since 2000 and compare them to how much prices have fallen. If sales comps say prices rose 100% since 2000 and have dropped 10% since 2005/2006, your still at the peak.

[vdecapio]

I would say now is not a good time to buy condos, be patient. I think most common men would agree that prices will continue to fall. This is not the Jersey shore. Its NEFL. It will drop.

[songgirl]

I think I have a lot of research to do

I'll just keep my eyes open for the next few months. If anyone knows of a great deal that comes up in Vilano for a house or condo, please let me know.