In a hot housing market with low supply and high demand, buyers may need to consider looking beyond the obvious to find a home. This may mean going in search of the “hidden gems”: homes that may not look like much on the outside (or even on the inside), but their location can’t be beat. And with some work, you could have a highly valuable property on your hands.

Where to Find Them

In Northeast Florida, hidden gems can be found in neighborhoods with older homes such as San Marco, Avondale, Riverside, Ortega, and Ponte Vedra Beach. The common denominator among them all? “Location, location, location.”

In Ponte Vedra Beach, the area known as Old Ponte Vedra is highly appealing because of its proximity to the beach and the Ponte Vedra Inn and Club. Wide lots, no association fees, and a variety of housing styles create for one hot neighborhood. Homes range from older ranches to gorgeous custom homes that were built as a result of removing the previous structure that was there. The “dirt value” of this neighborhood is around the $1 million range, and fixed-up or substantially rebuilt homes are in the high $1 million to $2 million–plus range. If you can find something in this area priced at $1 million or lower, you’ve got a nice opportunity for a higher appreciation potential. Simply working with the current structure and making some simple improvements could have significant impact.

One such property can be found at 60 San Juan Drive. Situated on a huge corner lot with a two-car garage, this 1954 concrete block ranch has three bedrooms and two and a half baths, and it features a large addition. Just a five-minute walk to the beach, it’s as close as you can get to being on the ocean for a price far below that of oceanfront property. This home has gorgeous hardwood floors and newer windows, and it’s structurally well-maintained. This home is on the market for just under $1.3 million — while substantially fixed-up or newer homes surrounding this property sell for roughly $2 million. Want to learn more about what makes this home a hidden gem? See for yourself!

What to Keep in Mind

Some issues to consider when looking at these types of properties:

• Look at the value of what more move-in-ready properties are selling for in the area.
• What’s going on around the property — is there a lot of renovation or building in an already-established area?
• What would it cost to change or renovate the property you’re considering? Walk through the property with a reputable contractor to get an idea of what can be done.
• Ask yourself if you can easily find another similarly priced property in your desired area that’s more fixed up. If the answer is no, then consider the hidden gem.

Why Hidden Gems?

With hidden gems, you can get a less expensive home in a desirable area; and if there’s less competition for these than for more fixed-up homes, you might have more negotiating power, particularly if the home has been on the market for a while. Consider creative ways to work with the seller to get your offer accepted. For example, a love letter expressing what attracts you to the area and the life you envision creating in that home. Older sellers may be very taken by the idea of a younger family starting out in their home and experiencing many of the same things they did: birth of children, birthday parties — all the happy milestone events that help make a house a home.

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