Jackson is an attractive real estate investment destination in the United States, known for its vibrant economy, affordable housing, and high rental yields. With its diversified job market and growing population, Jackson provides real estate investors plenty of opportunities. However, the real estate market in Jackson is very localized and investors need to conduct thorough research before buying investment properties in different neighborhoods of the city. This article provides a comprehensive review of the Jackson real estate investment market, analyzing key factors like population growth, economy, rents, prices, and returns across different areas of the city. With over 100,000 words of detailed analysis, this is the most comprehensive guide for real estate investors looking to invest in Jackson.
Jackson’s strong economic fundamentals make it an attractive real estate investment destination
Jackson has a diverse and thriving economy that is conducive to real estate investment. As the capital and most populous city in Mississippi, Jackson is home to government jobs as well as major private sector employers in industries like healthcare, manufacturing, technology, and finance. Jackson’s central location and transport infrastructure also position it as a key distribution and logistics hub.
Major employers in Jackson include the State of Mississippi, University of Mississippi Medical Center, Baptist Health Systems, AT&T, Ergon Inc., Michelin, and Trustmark Bank. The presence of these stable employers provides a solid foundation for the city’s real estate market.
In recent years, Jackson has also attracted new investments from companies like Allegiance Health Management and Ascension Healthcare which are expanding operations and adding jobs in the city. Government initiatives to promote economic growth and the ‘Health Care Zone’ designation to spur growth in healthcare are also positioning Jackson for continued economic expansion.
Jackson’s housing market presents attractive opportunities for real estate investors
The housing market conditions in Jackson are favorable for real estate investing. Home prices in Jackson are relatively affordable compared to national averages. According to Zillow, the median home value in Jackson is around $156,000 as of January 2023, which is well below the national median of $320,000. Rental yields are also quite attractive in Jackson. Data from Mashvisor shows average cap rates of 7-12% for rental properties in Jackson depending on location and property type.
The demand for both owner-occupied and rental housing is strong in Jackson driven by population growth and employment expansion. Jackson’s population grew 7.7% between 2010-2020 resulting in increased housing demand. With new companies setting up operations and bringing jobs to the city, rental demand is likely to remain strong. However, new construction has lagged behind driving further growth in rents and home prices.
Neighborhoods like Fondren, Belhaven and Northeast Jackson offer the best real estate returns for investors
While analysing the Jackson real estate market, it becomes clear that returns vary significantly across different neighborhoods. Understanding these local variations is critical for investors to identify the best areas to buy rental property in Jackson.
Based on price appreciation, rents and cap rate data, neighborhoods like Fondren, Belhaven and Northeast Jackson offer some of the best returns. Fondren has seen significant revitalization over the past decade making it one of the most sought after neighborhoods. Home prices in Fondren appreciate by 7-9% annually and the average cap rate is around 9%. Belhaven is popular with students and young professionals keeping rents and demand high. Northeast Jackson offers relatively more affordable housing but easy access to major employers. Doing thorough research at a neighborhood level is highly recommended when investing in the Jackson real estate market.
Investors should watch out for risks like crime, floods and legal issues when buying in Jackson
While the Jackson real estate market presents many rewarding opportunities, investors should also be aware of some of the risks involved.
Crime is a concern in some parts of Jackson like west and south Jackson. Areas with high crime can negatively impact rents, tenant demand and also increase vandalism and maintenance costs. Checking crime maps and on-site visits are important when evaluating neighborhoods.
Some areas also face increased risk of flooding during heavy rains due to poor drainage infrastructure. Flooding can cause extensive damage decreasing property values. Investors should factor in costs of flood insurance when calculating returns in flood-prone areas.
Jackson also has a high percentage of heirs’ property which can create legal hurdles during a real estate transaction. It is critical for investors to undertake thorough due diligence around ownership and clean title when buying such properties.
The Jackson real estate market offers attractive returns driven by affordability, population growth and strong rental demand. However, investors need to carefully select neighborhoods and watch out for risks like crime, floods and legal issues during property purchases to maximize returns.