Current Gainesville, Florida Rental Market

7 Replies

Hey everyone!

Happy new year! 

I know there was a past post a few years ago on this topic, but I wanted to start an updated tread to get more information on the current market in Gainesville, FL. I understand a lot of people are flocking south, so open to hear more information from investors. A few preliminary questions I have are: 1) How is the overall economy? I understand there are some major hospitals and government jobs down there, but how has the economy changed with the colleges and COVID, etc...?; 2) I noticed crime is decreasing somewhat in the area. Is crime a major issue?; 3) I understand the county has a high property tax rate. Are homes being reassessed frequently? Or does this depend on the municipality?

Any other information would be greatly appreciated. I'm interested in the sub 200K market.

Thank you very much!


Mark

Hi Mark,

What is your overall goal? Are you looking for rentals or to flip in Gainesville? It seems like the rental market has taken a big hit due to COVID and UF/Santa Fe classes going online, causing a mass exodus of students, so vacancy rates seem to have increased substantially. There is fairly low inventory of homes under $250K so they are snatched up pretty quickly with multiple offers, but if you're a cash buyer and okay with few contingencies, you still have a good shot of snagging one. With so many jobs going remote this year it seems like families are leaving apts/condos/townhomes in favor of detached SFRs with more space, but I'm sure that's a national trend, not just local to Gainesville. 

From what I understand, Alachua County property taxes are the 2nd highest in the state, and will likely always be high, due to the fact that so much of the land around here is owned by the University and hence can't be taxed, so the local government is sustained by taxing the surrounding homeowners. If you are looking into rentals, it is also important to note that there is now a local Landlord Permit Fee required to be paid annually for each unit you own, and the city has a right to inspect your properties to make sure they're being maintained up to code. I no longer have any short-term rentals here, so you'd have to fact check this, but I have also heard rumors of an increase in short-term rental taxes here.

1. On the surface the economy is pretty stable. Gainesville is known for medical and also the U of F. Residential housing and new construction continued to have a hard time keeping up with demand. This is mainly fueled by record low interest rates. *What I'm not sure of is the long term prognosis of the student market. This past year sales were down for student housing due to there only being online classes. Also like Jennifer said, there was unusual vacancies for student housing due to students not being in town. I've noticed so far, parents are buying for students again. It looks like demand is picking up for 1 and 2 bedroom units. Sales of 3 and 4 bedroom units have continued to remain a bit stagnant with student housing but may pick up as prices have dropped a bit.

2. As to crime, I'm pretty sure there are sites online you can visit to check the stats. The short answer, there is always trouble to be found if you look for it. There's not anything going on however that is significantly affecting the investment aspect of the housing market.

3. If you visit the Alachua County Property Appraiser site, you'll find that the assessed values they have are often less than what the true market values are. To add to Jennifers feedback about the University of FL and the city of Gainesville passing on the tax responsibilities with higher rates to home owners: of note, decades ago this was necessary due to there being significantly less of a tax base. It's interesting however that even after all of the decades of residential growth and a significantly larger tax base, the tax rates have not gone down.

Originally posted by @Jennifer Turner :

Hi Mark,

What is your overall goal? Are you looking for rentals or to flip in Gainesville? It seems like the rental market has taken a big hit due to COVID and UF/Santa Fe classes going online, causing a mass exodus of students, so vacancy rates seem to have increased substantially. There is fairly low inventory of homes under $250K so they are snatched up pretty quickly with multiple offers, but if you're a cash buyer and okay with few contingencies, you still have a good shot of snagging one. With so many jobs going remote this year it seems like families are leaving apts/condos/townhomes in favor of detached SFRs with more space, but I'm sure that's a national trend, not just local to Gainesville. 

From what I understand, Alachua County property taxes are the 2nd highest in the state, and will likely always be high, due to the fact that so much of the land around here is owned by the University and hence can't be taxed, so the local government is sustained by taxing the surrounding homeowners. If you are looking into rentals, it is also important to note that there is now a local Landlord Permit Fee required to be paid annually for each unit you own, and the city has a right to inspect your properties to make sure they're being maintained up to code. I no longer have any short-term rentals here, so you'd have to fact check this, but I have also heard rumors of an increase in short-term rental taxes here.

Hi Jennifer!

Thank you so much your input! Right now, I am just keeping an open mind. I know there is movement from the northeast to the south, so I was interested in researching some markets down there. Gainesville caught my eye, b/c it's more inland and rents decent in relation to home prices. I would be interested in more long term rentals.

All the information you provided is high level stuff - again, much appreciated. Definitely not a fan of permit fees...

Are you familiar with any developments out west, by Newberry?

Thank you for your help,

Mark

Originally posted by @Shawn K Hicks :

1. On the surface the economy is pretty stable. Gainesville is known for medical and also the U of F. Residential housing and new construction continued to have a hard time keeping up with demand. This is mainly fueled by record low interest rates. *What I'm not sure of is the long term prognosis of the student market. This past year sales were down for student housing due to there only being online classes. Also like Jennifer said, there was unusual vacancies for student housing due to students not being in town. I've noticed so far, parents are buying for students again. It looks like demand is picking up for 1 and 2 bedroom units. Sales of 3 and 4 bedroom units have continued to remain a bit stagnant with student housing but may pick up as prices have dropped a bit.

2. As to crime, I'm pretty sure there are sites online you can visit to check the stats. The short answer, there is always trouble to be found if you look for it. There's not anything going on however that is significantly affecting the investment aspect of the housing market.

3. If you visit the Alachua County Property Appraiser site, you'll find that the assessed values they have are often less than what the true market values are. To add to Jennifers feedback about the University of FL and the city of Gainesville passing on the tax responsibilities with higher rates to home owners: of note, decades ago this was necessary due to there being significantly less of a tax base. It's interesting however that even after all of the decades of residential growth and a significantly larger tax base, the tax rates have not gone down.



Hi Shawn,

Thank you for your reply - again, very good information.

1. Is Gainesville trying to do anything to retain students after graduation? I know this may be a crummy question given your mention about remote schooling, but figured I would asked.

2. When you say 3 - 4 units, I presume you are taking about a condo? Not SFR, correct?

Thank you!

I actually live out in Newberry which is just a quick drive into town. Most residence who live here work in Gainesville or surrounding cities so it's a great location. Prices can be lower than Gainesville but unless your looking at one of the new construction neighborhoods you've got slim pickings especially if your searching only the MLS and not able to go driving for dollars. Rentals do go very quick as there is none available. It is completely different to the Gainesville market as you would have families or individuals renting and not college students.

Newberry overall is pretty small and there are only a handful of subdivisions and more options for land with a mobile or to build. 


Originally posted by @Jenn Barona :

I actually live out in Newberry which is just a quick drive into town. Most residence who live here work in Gainesville or surrounding cities so it's a great location. Prices can be lower than Gainesville but unless your looking at one of the new construction neighborhoods you've got slim pickings especially if your searching only the MLS and not able to go driving for dollars. Rentals do go very quick as there is none available. It is completely different to the Gainesville market as you would have families or individuals renting and not college students.

Newberry overall is pretty small and there are only a handful of subdivisions and more options for land with a mobile or to build. 

Hey Jenn,

Thanks for the info. Yeah, I definitely need to get my feet on the ground there and research in person. I actually prefer the family / individual tenant over college student (sorry, should have clarified in my initial post). 

And just for my clarification, there are more options for raw land to develop?

 

Thank you,

Mark

For sure. If you go further west than Gainesville you’ll get to “Jonesville” which is west of NW 143rd st before you get to Newberry. You’ll have more vacant land and larger lots to build on. If you’re looking to build out a neighborhood there are several large lots to develop out. Although if you are looking to keep as a rental I would maybe start looking in Gilchrist County. It’s about 10 minutes west of Newberry and your taxes will be split in half. Alachua has one of the highest taxes in the state.