The real estate market is ever-changing, especially these days with the rapid growth of technology and housing market trends. However, one thing that remains certain and consistent is that location is key to a successful real estate investment. The location of an investment property determines its value, rental expenses, rental income, and other factors that property investors have to consider before buying a rental property. As a result, not every real estate market is profitable for real estate investing.
Related: Top 10 Locations of Real Estate’s Most Profitable Investments in 2018
This leads us to our main topic – is it profitable for property investors to invest in New Orleans real estate market? Short answer: yes. Let’s discuss why 2018 is a good time to invest in New Orleans real estate, and which neighborhoods New Orleans real estate investors should keep an eye on. So, if you’re planning on buying a New Orleans real estate investment property this year, keep reading!
Note: the data in this article is provided by Mashvisor’s rental property calculator – a versatile tool that allows property investors to calculate the different values related to an investment property (traditional and Airbnb), including the Cash on Cash Return, Cap Rate, Cash Flow, and Occupancy Rate.
Why Invest in New Orleans Real Estate
Successful property investors seek investment properties that yield the highest return on investment. Although the aftermath of Hurricane Katrina left a toll on New Orleans and its growth in many sectors, the city shows successful recovery, especially in the real estate industry. Home values have gone up by 43%, but homes are still considered affordable compared to the national average. Thus, you’ll notice that more and more property investors are buying New Orleans real estate investment properties.
Moreover, New Orleans enjoyed a job growth rate of 2%, which is just above the national average. New Orleans is, in fact, home to many young entrepreneurs and millennials looking for jobs especially within its tech and tourism sectors. As more people are moving to the city, many property investors find New Orleans real estate a good market for investment opportunities.
In addition, inventory and construction of new investment properties had slowed down, meaning limited supply. However, this is not a bad thing – with more and more people buying homes, demand in New Orleans real estate has finally outpaced supply. Based on real estate market analysis, this is another reason for the affordability of investment properties in New Orleans. Along with low property taxes, this boosted the New Orleans real estate market.
Related: What Are the Top 10 States with Lowest Property Tax Rates in 2018?
Why 2018 is a Good Time to Buy a New Orleans Real Estate Property
As any real estate expert would tell you, spring is the busiest time in the real estate investing industry, and a very good time to buy a New Orleans real estate investment property in particular.
Inman’s Special Report: 2018 real estate industry outlook painted an overall positive picture for the U.S housing market. As mentioned, this means high demand, strong housing development, affordable home prices, and modest appreciation rate for New Orleans real estate – the city’s 1-year appreciation rate is 3.86%, according to the Federal Housing Finance Agency.
Another trend shaping the positive outlook for the New Orleans real estate market this year is the continuing and increasing popularity of New Orleans’s suburbs versus the city, especially among the first-time real estate investors. You will notice in our list below that New Orleans suburbs offer rather affordable investment property prices and high rental income – which are factors that lead to a high return on investment.
Related: Real Estate Questions: What Is a Good Return on Investment?
A Quick Summary of New Orleans Real Estate Market
The Best Neighborhoods in New Orleans Real Estate Market to Buy a Rental Property
New Orleans Real Estate – St. Thomas
- Median Property Price: $309,000
- Traditional Rental Income: $1,541
- Airbnb Rental Income: $4,411
- Traditional Cash on Cash Return: 0.72%
- Airbnb Cash on Cash Return: 8.13%
- Traditional Cap Rate: 0.72%
- Airbnb Cap Rate: 8.13%
- Occupancy Rate: 63.58%
New Orleans Real Estate – Central Business District
- Median Property Price: $423,750
- Traditional Rental Income: $2,196
- Airbnb Rental Income: $4,001
- Traditional Cash on Cash Return: 3.37%
- Airbnb Cash on Cash Return: 6.92%
- Traditional Cap Rate: 3.37%
- Airbnb Cap Rate: 6.92%
- Occupancy Rate: 56.77%
New Orleans Real Estate – Lower Garden District
- Median Property Price: $363,950
- Traditional Rental Income: $2,510
- Airbnb Rental Income: $4,166
- Traditional Cash on Cash Return: 2.64%
- Airbnb Cash on Cash Return: 6.78%
- Traditional Cap Rate: 2.64%
- Airbnb Cap Rate: 6.78%
- Occupancy Rate: 65.3%
New Orleans Real Estate – East Riverside
- Median Property Price: $407,000
- Traditional Rental Income: $1,926
- Airbnb Rental Income: $3,371
- Traditional Cash on Cash Return: 2.78%
- Airbnb Cash on Cash Return: 6.04%
- Traditional Cap Rate: 2.78%
- Airbnb Cap Rate: 6.04%
- Occupancy Rate: 68.12%
New Orleans Real Estate – Algeirs Point
- Median Property Price: $323,500
- Traditional Rental Income: $1,275
- Airbnb Rental Income: $2,682
- Traditional Cash on Cash Return: 1.34%
- Airbnb Cash on Cash Return: 5.74%
- Traditional Cap Rate: 1.34%
- Airbnb Cap Rate: 5.74%
- Occupancy Rate: 52.67%
New Orleans Real Estate – St. Claude
- Median Property Price: $204,000
- Traditional Rental Income: $1,093
- Airbnb Rental Income: $1,976
- Traditional Cash on Cash Return: 2.93%
- Airbnb Cash on Cash Return: 4.42%
- Traditional Cap Rate: 2.93%
- Airbnb Cap Rate: 4.42%
- Occupancy Rate: 61.81%
New Orleans Real Estate – Leonidas
- Median Property Price: $281,400
- Traditional Rental Income: $1,399
- Airbnb Rental Income: $1,377
- Traditional Cash on Cash Return: 3.79%
- Airbnb Cash on Cash Return: 4.24%
- Traditional Cap Rate: 3.79%
- Airbnb Cap Rate: 4.24%
- Occupancy Rate: 49.57%
New Orleans Real Estate – Central City
- Median Property Price: $145,750
- Traditional Rental Income: $1,181
- Airbnb Rental Income: $1,635
- Traditional Cash on Cash Return: 7.55%
- Airbnb Cash on Cash Return: 2.85%
- Traditional Cap Rate: 7.55%
- Airbnb Cap Rate: 2.85%
- Occupancy Rate: 58.79%
New Orleans Real Estate – Uptown
- Median Property Price: $609,000
- Traditional Rental Income: $2,379
- Airbnb Rental Income: $3,208
- Traditional Cash on Cash Return: 1%
- Airbnb Cash on Cash Return: 2.48%
- Traditional Cap Rate: 1%
- Airbnb Cap Rate: 2.48%
- Occupancy Rate: 53.96%
New Orleans Real Estate – West Riverside
- Median Property Price: $595,000
- Traditional Rental Income: $1,536
- Airbnb Rental Income: $2,235
- Traditional Cash on Cash Return: 0.6%
- Airbnb Cash on Cash Return: 1.58%
- Traditional Cap Rate: 0.6%
- Airbnb Cap Rate: 1.58%
- Occupancy Rate: 55.23%
Click here to find and analyze the best investment properties in any neighborhood in New Orleans right now!
The Bottom Line
Today, the New Orleans real estate market is one of the more attractive locations for affordable investment opportunities. Thus, whether you’re a real estate investor looking to buy your first investment property, or a real estate investor looking to grow your investment portfolio with a new rental property, New Orleans real estate is your destination!
Sign up for Mashvisor now to get access to our rental property calculator as well as other real estate investing tools to help you find and analyze the best investment properties in any state, city, and neighborhood across the U.S housing market.
Related: Mashvisor: A Real Estate Investing Tool for All Your Investment Needs
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