Is it time for investors in New Orleans real estate to move from buy and flip to buy and hold?
It might be.
Year over year, rental rates in New Orleans have been on the rise, with a shortage of properties in the neighborhoods and condition that tenants are searching for.
Not just apartments and doubles, the single family rental market has limited options for families that plan to be short term (1-3 year) residents of the city.
Who is the target market for these investments?
- Millennials who are moving out of their parents home and want to live in the hippest neighborhoods, close to work, bars, restaurants and entertainment options. Often, they can’t afford to purchase in those neighborhoods, so they opt to rent in an area that fits their lifestyle.
- Short term residents with families are most likely to want to live in a place with a yard, so don’t discount the value of investing in an established neighborhood that’s not in the heart of the city.
According to a recent survey by For Rent Media, 69% of renters view the location of a rental unit as a major contributor to their choice of place to live, so investors need to be selective in their choices as well. Unless your goal is long term lower income rentals, you should be watching the hot spots in the city along with the areas that have showed long term stability in housing prices.
What about property condition?
Condition is a factor for more and more tenants. No longer can you throw some cheap appliances in, paint the walls beige and rent a place in a day. When the finishes on a property aren’t up to snuff, your odds of keeping a long term tenant drop dramatically as they move on to another place as soon as their lease is up.
What’s next in New Orleans real estate?
Prices continue to rise across the city, so you can feel comfortable holding and renting for the next year while we watch the trends. While we don’t have a crystal ball that will scream out “sell now!”, we do have the data to help you decide when the time is right for you.
Need some help finding your next New Orleans investment property? Call us today at 504-327-5303 and we’ll be happy to not only assess your needs, but find the right place for you.