Investor Blogs Should You Invest in the New Orleans Real Estate Market 2020? by Eman Hamed July 6, 2020July 5, 2020 by Eman Hamed July 6, 2020July 5, 2020 Looking for real estate investment opportunities in the State of Louisiana this 2020? Seeing as it’s the largest city here, you’re almost certainly considering New Orleans. Nicknamed the “Big Easy”, it’s known as the best city to visit for fun, parties, events, and culture. But how’s the New Orleans rea estate market doing right now? Is investing in real estate in New Orleans worth it? And is now a good time to buy homes in New Orleans for investment? To determine whether or not any housing market is one of the best places to buy rental property, you should study a number of real estate market trends. These trends will let you know how the market has been performing and what to expect in the future according to predictive data. Keep on reading our New Orleans housing market analysis and update where we explore these trends and provide data to answer the above questions and more. New Orleans House Prices & Appreciation To see how the New Orleans housing market is doing, the first trend to look at is house prices. According to real estate data from Mashvisor, the median property price in New Orleans, LA is $433,064 ($230 price per square foot). Even though New Orleans house prices are some of the most expensive in the Louisiana real estate market, they’re considered reasonable compared to home prices in other major cities of the same size. Related: 20 Cheapest States to Buy a House for Investment In addition, experts predict that home prices in the New Orleans real estate market will increase in 2020. For real estate investors, this means a New Orleans investment property will appreciate in value over the short and long-term. According to NeighborhoodScout, the New Orleans real estate appreciation rate over the last 10 years has been 46.15% (an annual average rate of 3.87%), which ranks in the top 30% nationwide. Another positive trend for a New Orleans real estate investor in 2020 is that we’re now seeing the lowest mortgage rates in years. Meaning, you can qualify for a mortgage loan and make your costs even more affordable. On top of that, New Orleans is a buyer’s market According to Realtor.com. This means there are roughly more active homes for sale than there are buyers. Hence, you have a high chance of finding affordable New Orleans houses for sale to buy as investments. New Orleans Economy & Job Market The economic fallout of COVID-19 has hit the housing market hard, but businesses are picking back up in the New Orleans area. This is because New Orleans has much more than tourism to fuel its economy. It is a major port, the commercial and economic hub for the Gulf Coast, and has been experiencing job market growth in sectors like medical, manufacturing, industrial, construction, business services, and international trade. From July 2017 to May 2019, the New Orleans Metropolitan area economy has been growing at a constant rate, adding 6,000 to 12,000 jobs per year. Economists predict that the area will see an uptick in economic activity this year and beyond as well. The economic forecast shows that the New Orleans Metropolitan area is forecast to add 9,400 jobs in 2020 (up 1.6%) and another 10,100 jobs in 2021 (up 1.7%). This employment and job growth is naturally increasing the demand in the New Orleans real estate market. As real estate investors know, rental demand is very dependent on job growth. After all, cities with strong job markets are always the best places to invest in real estate. This is because job opportunities attract more people and lead to population growth. As people move to a new city, they typically prefer to rent than to buy a house. This results in an increasing demand for rental properties and growing rental prices! With high rents and low property costs, investing in New Orleans real estate can lead to positive cash flow in 2020. Related: 10 Best Job Markets to Invest in Real Estate in 2020 New Orleans Renter Population & Demand New Orleans’ population is a mixture of homeowners and renters, with people primarily living in single-family homes. However, data shows that New Orleans is a city of renters. According to the US Census Bureau, 52.6% of housing units in the city are renter-occupied. In addition, the price to rent ratio in New Orleans is 23 according to Mashvisor’s data. The price to rent ratio is a metric that real estate investors check to see what’s more affordable for residents in the market: to buy a house or to rent one. If the ratio is above 21, it means that it’s definitely better to rent a house than to buy one. Besides the growing job market, another reason contributing to the strong rental demand and renter population in the New Orleans real estate market 2020 is the student market. New Orleans is home to many universities including Tulane University, the University of New Orleans, Dillard University, and Loyola University New Orleans. Investors can buy multiple rental properties here and make great profits catering to college students. According to Mashvisor’s data and predictive analytics, you can earn $1,529 in monthly rental income when you invest in New Orleans long-term rental properties. Find a Profitable Traditional Rental Property New Orleans Airbnb Laws and Regulations Is Airbnb legal in New Orleans? Yes – but it’s not that simple. The city announced a set of Airbnb regulations that went into effect December 1st, 2019 that apply to all short-term rental properties. The first thing for investors to keep in mind is that you must be an owner-occupant to rent out your home on Airbnb. In addition, all owners of New Orleans short-term rentals must apply for and receive an STR permit in order for the rental to be used legally. The required permits are for: Any property in the city used as a short-term rental (STR Owner permit) Any person managing any short-term rental in the city (STR Operator permit) Any service facilitating booking transactions for a short-term rental (STR Platform permit) Investors in the New Orleans real estate market also need to pay permit fees as well as other fees taxes like an occupancy fee of $5 per night rented, 5% city sales tax, and a 6.75% STR equalization occupancy tax. If you violate any of these Airbnb laws and regulations, you may face monetary fines at a maximum of $500 for each violation. For more about New Orleans short term rentals, click here. These regulations may demotivate you from New Orleans real estate investing if your preferred strategy is to rent out on Airbnb. However, these laws don’t stop Airbnb New Orleans from being profitable! According to Mashvisor’s Airbnb data, you can expect to enjoy an average daily rate of $187, an Airbnb occupancy rate of 44%, and a monthly rental income of $2,437 from an Airbnb investment in New Orleans. Related: Where to Find Airbnb Data in 2020 for Real Estate Investing? Seeing that you must be an owner-occupant and live on the property full-time to rent it out on Airbnb, a great way to invest in New Orleans short-term rentals is by house hacking. This strategy involves buying a New Orleans investment property that is a duplex or triplex, live in one unit, and rent out the others for tourists. When following this strategy, your rental property can make more as an Airbnb rental than when you rent it out traditionally. Best Neighborhoods in New Orleans for Traditional Rentals By now, you should have an idea of whether or not to invest in New Orleans real estate market this year. And if you decided that yes, New Orleans is your next investment location, the next step is to find the best neighborhoods for buying rental property here. Luckily, you can see how different neighborhoods are performing in any city using Mashvisor’s Real Estate Heatmap. To learn more about how we will help you make faster and smarter real estate investment decisions, click here. According to our neighborhood data, these are the neighborhoods you should consider for renting out traditionally in the New Orleans housing market 2020: #1 Little Woods Median Property Price: $123,528 Price per Square Foot: $95 Average Days on Market: 48 Price to Rent Ratio: 8 Monthly Traditional Rental Income: $1,232 Traditional Cash on Cash Return: 4% #2 Viavant-Venetian Isles Median Property Price: $116,250 Price per Square Foot: $83 Average Days on Market: 130 Price to Rent Ratio: 8 Monthly Traditional Rental Income: $1,150 Traditional Cash on Cash Return: 4% #3 Plum Orchard Median Property Price: $140,000 Price per Square Foot: $71 Average Days on Market: 3 Price to Rent Ratio: 10 Monthly Traditional Rental Income: $1,215 Traditional Cash on Cash Return: 3% #4 West Lake Forest Median Property Price: $210,940 Price per Square Foot: $107 Average Days on Market: NA Price to Rent Ratio: 13 Monthly Traditional Rental Income: $1,364 Traditional Cash on Cash Return: 3% #5 Dixon Median Property Price: $258,719 Price per Square Foot: $150 Average Days on Market: 213 Price to Rent Ratio: 15 Monthly Traditional Rental Income: $1,403 Traditional Cash on Cash Return: 3% Best Neighborhoods in New Orleans for Airbnb Rentals Are you planning to buy an Airbnb investment property in the New Orleans real estate market? Then these are the best neighborhoods to consider where short-term rentals are most profitable according to Mashvisor’s data: #1 Tulane-Gravier Median Property Price: $428,750 Price per Square Foot: $165 Average Days on Market: 75 Average Airbnb Daily Rate: $188 Monthly Airbnb Rental Income: $4,595 Airbnb Occupancy Rate: 53% Airbnb Cash on Cash Return: 6% #2 Tall Timbers-Brechtel Median Property Price: $241,337 Price per Square Foot: $93 Average Days on Market: 20 Average Airbnb Daily Rate: $245 Monthly Airbnb Rental Income: $3,091 Airbnb Occupancy Rate: 40% Airbnb Cash on Cash Return: 6% #3 Holly Grove Median Property Price: $228,914 Price per Square Foot: $142 Average Days on Market: 12 Average Airbnb Daily Rate: $150 Monthly Airbnb Rental Income: $2,383 Airbnb Occupancy Rate: 44% Airbnb Cash on Cash Return: 6% #4 St. Roch Median Property Price: $297,971 Price per Square Foot: $145 Average Days on Market: 147 Average Airbnb Daily Rate: $185 Monthly Airbnb Rental Income: $2,344 Airbnb Occupancy Rate: 51% Airbnb Cash on Cash Return: 5.5% #5 City Park Median Property Price: $487,000 Price per Square Foot: $191 Average Days on Market: 115 Average Airbnb Daily Rate: $122 Monthly Airbnb Rental Income: 41% Airbnb Occupancy Rate: $4,557 Airbnb Cash on Cash Return: 5.5% You can look for and analyze the best New Orleans investment properties in your neighborhood of choice using Mashvisor’s investment tools! Start your 7-day free trial with Mashvisor now to get started. Start Your Investment Property Search! START FREE TRIAL AirbnbBuyers MarketLouisianaNew Orleans LAProperty PricesTraditional 0 FacebookTwitterGoogle +PinterestLinkedin Eman Hamed Eman is a Content Writer at Mashvisor. With a focus on market reports, she enjoys researching the state of the real estate market in different cities across the US. Eman also writes about trends, forecasts, and tips for beginner investors to gain the confidence and knowledge they need to make wise decisions. Previous Post 10 Best Job Markets to Invest in Real Estate in 2020 Next Post Why You Don’t Need an Airbnb Spreadsheet for Analysis Related Posts Top 30 Locations for Traditional Cash on Cash Return in 2022 Where Can You Get the Most Reliable Airbnb Data by City in 2022? Comparative Market Analysis in Real Estate Investing: The Ultimate Guide How to Set Your Airbnb Pricing Strategy for 2019 Tucson Housing Market 2020: Should You Invest? 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