Licensed Louisiana Realtor
504-231-2004
28th Nov 2017 | by: Jacob Freedman

As the rent in New Orleans continues to rise, New Orleanians have to choose between capitalizing on the rising cost of housing or paying a steep price. CNN ranked New Orleans as the sixth worst city for renters in the United States, citing a 9 percent hike in rents and a 1.5 percent income decline since 2009 (Ben Rooney 2015). Many people think that they cannot afford to buy a home, but as rents rise each year, perhaps not buying one will prove even more costly.

 

A Zumper study put the average rent for a one bedroom at a whopping $1,330 per month (Eric Craig 2017). That is almost sixteen thousand dollars per year. At the end of that year, after paying $16,000, you will walk away with… NOTHING. When I think of investing $16,000, I want to receive at least some sort of return. New Orleans is a renter’s city to the great benefit of those who own property.

 

For example, let’s think about the duplex for sale at 3104-06 General Taylor Street. A duplex is a house with two units, generally used for two separate families or tenants. This split unit has two bedrooms on each side and is on the market for $154,900. Say we put 10% down, which is $21,242, and have to pay $1,034 per month in mortgage payments. This monthly mortgage payment is actually lower than the average rent for a one bedroom in New Orleans. Plus, you can rent out the other side of the property and bring in at least $750 per month ($750 is what the owner is currently receiving). With that in mind, we can put the rent money towards the mortgage and make the payments just $284 per month.

 

The first year will come with the highest cost, we spend $24,650 including down payment (still, this costs only $8,650 more that year than renting the average one bedroom). Each subsequent year we will only spend $3,408 ($284 per month), because we only have to pay the down payment once. Most importantly, you will not be paying rent! Instead of walking away with nothing each year (as most renters do), you will be increasing your equity in the home that you now own, thus increasing your personal wealth. Equity is the value of your house less the mortgage, meaning it is the value of the property that you can “cash in” upon sale.

 

In this way, you can make your money work for you. Instead of paying into the pockets of your landlord, you will be padding your own pockets. You can increase your equity by paying down the mortgage with the help of your tenants rent. Meanwhile, the market will likely increase the value of your home, thus further growing your equity. By owning a slice of New Orleans, you can welcome the likelihood of rising property values and rents, they will mean more money for you.

 

With interest rates so low, getting the cash to buy a house is affordable right now. Credit is likely as cheap as it will be for some time (Patti Domm 2017). Contact Chris Smith today for more details and stop giving your hard earned money away. These six homes are great examples of how affordable owning a home can be.

Click the links to view pictures and more information.

 

3104-06 Gen Taylor St

This all brick double in the Broadmoor neighborhood features off street parking, large kitchens with interior washer and dryer, ceramic tiled floors, and great storage. It has two units, each with two separate bedrooms and one bathroom. One side already has long term tenants paying $750 per month. This property could be a great cash cow with both sides rented or it could be owner occupied. The home is low maintenance (tile, etc.), and all for $154,900.

http://www.chrissmithhomes.com/properties/3104-06-general-taylor-st-new-orleans-la-70125-for-sale-154900/

SOLD for $134,000!

 

1402 Hancock St

This property is in the historic Old Gretna neighborhood. It is a newly renovated, raised cottage in excellent condition. It features refinished original hardwood floors, a spacious kitchen and den, quartz counters, stainless steel appliances, custom cabinets, and interior laundry. Three bedrooms in an oversized lot with a sizable, fenced-in backyard. This home is priced to sell at $149,000.

http://www.chrissmithhomes.com/properties/1402-hancock-st-gretna-la-70053-for-sale-149000/

 

3518 Huntlee Dr

This big Algiers home is in the Huntlee Village, it has almost 3,000 square feet! It features five separate bedrooms, formal living and dining rooms, and huge media room. The interior still needs some finishing touches, but for only $160,000, this place is a steal.

http://www.chrissmithhomes.com/properties/3518-huntlee-dr-new-orleans-la-70131-for-sale-160000/  

 

2700-2702 New Orleans St

This 7th Ward double is a great opportunity for the savvy investor. Both sides come with wonderful long-term tenants. This could be the perfect cash cow or owner occupied home. Let your tenants pay off your mortgage! Each unit comes with three bedrooms, large kitchens, and separate laundry rooms. Don’t miss this deal, six bedrooms for $169,900.

http://www.chrissmithhomes.com/properties/2700-02-new-orleans-st-new-orleans-la-70119-for-sale-169900/

 

1039 Pacific Ave

This cute three bedroom on Algiers Point is a luxury renovation of a classic New Orleans style raised cottage. It boasts ten-foot ceilings, refinished hardwood floors, elegant den and living room, formal dining room, and gourmet kitchen (quartz counters and custom cabinets). It also features a great master suite with walk in closet, interior laundry, and a large corner lot. This is quite the opportunity for $199,900.

http://www.chrissmithhomes.com/properties/1039-pacific-ave-new-orleans-la-70114-for-sale-229000/

 

3124 St. Roch Ave

This is a renovated four bedroom cottage in the 8th Ward. It has plenty of off-street parking and features a spacious floor plan, large updated kitchen (all stainless steel appliances), granite counters, custom cabinets, interior laundry room, and large fenced-in backyard. All for the affordable price of $109,000!

http://www.chrissmithhomes.com/properties/3124-st-roch-ave-new-orleans-la-70122-for-sale-125000/

 

 

Works Cited

http://money.cnn.com/2015/03/16/real_estate/cities-highest-rent/index.html

https://nola.curbed.com/2017/6/9/15767996/new-orleans-rent-affordability-average-wage-live-comfortably

https://www.cnbc.com/2017/09/20/fed-signals-interest-rates-will-keep-going-higher-as-it-exits-financial-crisis-policy.html

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