After William read my piece on being a landlord for the first time, he emailed to ask whether buying, repairing, and selling homes here in NOLA might be the best investment strategy for him. He emphasized that he wasn’t a young whippersnapper anymore and so was looking for a way to make a living as an investor that wouldn’t be as much of a long-term hassle as holding a rental. Of course, I responded with a resounding yes.
New Orleans investment property is my specialty. But, it still takes a lot of hard work to succeed even when you know where to find the best deals. I told him I couldn’t supply the required elbow grease, but I could give him some pointers on where he should look to get started. And, if it wasn’t too much trouble to venture into Treme, I’d do it over a cup of coffee from Backatown, too.
- Agreement of Purchase and Sale – A copy of the agreement should be forwarded to the lawyer.
- Name of the Mortgage Lender (if applicable) – It is common on home purchases for the purchaser’s lawyer to perform certain legal services for the mortgage lender. These services include giving the lender a legal opinion on the title the purchaser will hold and ensuring the lender will have a valid mortgage on the property according to the mortgage agreement.
- Inspection Report – A copy of any building inspection report that the purchaser may have received if required as a condition of your title insurance policy.
- Photo Identification – Copies of two pieces of photo identification (driver’s licence, passport, etc.) will be required for each purchaser.
- Date of Birth – The lawyer requires the dates of birth of all purchasers.
- Address for Service – The address that will be registered on the deed for future contact. Usually this is the address of the property in question, but may be a different address if the property is being purchased as an investment property.
- Title – If there is more than one purchaser, the purchasers need to instruct the lawyer whether the title will be taken as joint title or tenant-in-common.
- Property Insurance – As a condition of the mortgage, the lender will require that property insurance be in place on the closing date. This requires the purchaser’s insurance agent to send to the lawyer a certificate of insurance or binder letter showing that the insurance is in place and that the lender’s interest is noted on the property.
- Closing Funds – On or before the date of closing, the purchaser will need to provide the lawyer with sufficient funds to complete the purchase by certified cheque, bank draft or money order. These funds include the balance owing to the vendor as well as land transfer tax and any other required adjustments such as property taxes or fuel oil. The lawyer will contact the purchaser prior to closing to provide the exact amount required.
Where to Buy Investment Property in New Orleans
These days, I talk to a lot of people—both online and off—who’ve decided to buy investment property in New Orleans after they retire or as a strategy to build wealth now so that retirement can be more comfortable. And, I encourage both options. While the real estate market experiences its own ups and downs, these shifts aren’t nearly as dramatic as the stock market. Plus, when you buy, rehab, and sell homes like I do, where the market will be in ten years is not really your concern. Whether you can make a profit on your current investment after the repairs are finished in a handful of months, on the other hand, is. So, no matter when you start your career, buying, renovating, and selling real estate is a good investment for retirement. And, NOLA is a great city to invest in.
I’ll tell you why I like The Big Easy so much, too. If ever there was a great American comeback story, New Orleans is it. All but forgotten after Hurricane Katrina, then beat down a bit more by the Great Recession, NOLA came back swinging. Once the levees were repaired and revitalization efforts were underway, more jobs returned to the city. Before long, we’d regained most of the population we lost. And, that’s contributed to an increased demand for housing—so much so, in fact, that median list prices have also been on the upswing. If you can meet this demand by successfully buying, rehabbing, and selling homes at the right price, your investment returns could get a nice potential boost as well.
Of course, there are few better places to realize some of the best returns than in up-and-coming NOLA hotspots. And, here’s where I expect your best bets to be in 2019:
An extension of the revitalized Uptown area, the neighborhood of Freret has undergone its own renaissance in recent years. Public schools are performing above average, the number of family-friendly amenities has increased, and trendy shops, restaurants, and bars are popping up everywhere. But, because crime was once high in the area, Freret’s official move into up-and-coming status has been a relatively slow one.
With crime rates finally dropping, however, Freret’s popularity is rising—especially among first-time home buyers looking for NOLA neighborhoods that are still affordable. And, the rise in median home sales prices is starting to reflect this upward shift in demand. My prediction is that it won’t be long before Freret’s transition is complete. So, it’s best to get in on the ground floor now while you can still participate in this neighborhood’s rapid growth. That way, you can potentially grow your bank account balance, too.
Just a ferry ride across the Mississippi from the French Quarter, Old Aurora is out to make a name for itself as being the place to own a New Orleans home. And, with good schools, affordable housing, and a thriving nightlife, this urban community with a strong suburban feel is most likely to succeed. The crime rate in Old Aurora is lower-than-average for NOLA, which is a bonus. In fact, this factor alone can broaden the appeal of a transitioning neighborhood so that all types of potential buyers, from retired couples to young, single professionals, want to get in.