Yes, the revelry is back! After a year of canceled festivities, NOLA is drawing tourists again to its Mardi Gras, live music, costume parties, and crazy Creole cuisine. While 2021 had been a lackluster year, 2022 and beyond are poised to become positive years for New Orleans short-term rentals.
New Orleans, Louisiana has always been a top tourist destination. The New York Times named it the best city to visit in 2018, noting its diverse influences from Europe, the Caribbean, Latin America, and Africa have made it into the ultimate melting pot.
Nowhere else can you find a more eclectic convergence of food, people, music, entertainment, art, architecture and history. Its non-stop party vibe – live music from jazz to blues to rock ‘n roll – makes it an all-year crowd-drawer, no matter what season.
The city made it to several of US News’ top rankings:
New Orleans’ economy simply thrives on its tourism, food, entertainment, and hospitality. In 2019, it broke records as 19 million tourists poured $10 billion into the local economy.
But NOLA experienced huge setbacks in 2021. Hurricane Ida, surging Delta and Omicron Covid cases, and a decision by the city government to call off carnivals and limit public gatherings hit a heavy blow. Two other major events, the Jazz and Heritage Festival and the French Quarter Festival were scrapped.
Tourists had already started dwindling as early as 2020 after the Mardi Gras became a Covid super-spreader event that year. New Orleans became a Southern hotspot for the pandemic and was the first city in the South to impose strict pandemic measures.
Since then, the city government has taken pains to implement the highest safety protocols. New Orleans is now open for both business and leisure. In fact, most businesses have been operating at 100% capacity both indoors and outdoors since late 2021.
Certainly, the shows must go on. All major events are now pushing through in 2022. And after seeing fewer and fewer Covid-19 cases this year, the local government lifted vaccine and testing requirements last May.
To see NOLA’s current pandemic-related guidelines, click here.
For a city that depends heavily on tourism, yes. Short-term rentals are allowed, but with restrictions.
Only 25% of units in commercial and mixed-use properties are allowed for short-term renting. Those in the Vieux Carré Entertainment (VCE) district, just 6 blocks from Bourbon Street between Iberville and Orleans Streets, are allowed. But properties in the Garden District and the rest of the French Quarter are banned.
For residential properties, short-term renting is allowed only if they have a homestead exemption. Each of those properties can rent up to 3 units. Homes that aren’t occupied by their owners are also banned.
In order to host short-term stays (less than 30 consecutive nights at a time), rental owners and operators are required to obtain a license from the city government.
The city provides detailed information on its laws and regulations on its Short-term Rentals page. You may also download and study the NOLA handbook on short-term rentals to find out the registration requirements, licensing rules, code and zoning restrictions, and other pertinent ordinances.
NOLA consists of 71 neighborhoods. According to Realtor.com, real estate in New Orleans is a buyer’s market – which means that the supply is greater than the demand for homes.
As of July 2022, the median listing home price was $381.5K, trending up 6.3% year-over-year. (Redfin places the price increase at 9%.) The median listing home price per square foot was $246.
The forecast for the New Orleans real estate market in 2022 is positive. Home values are expected to be higher in the 4th quarter than they were in the same period of 2021. Data from NeighborhoodScout shows that home appreciation rates in NOLA have been above average for the past decade.
The cumulative appreciation rate has been 65.57% over the last 10 years, equating to an annual average appreciation rate of 5.46%. That places New Orleans homes in the top 30% of appreciation rates in U.S cities.
With a population of 383,997, the city has affordable condos, townhomes, duplexes, and triplexes. There are also homes converted to apartments or other small apartment buildings (25.77%), large apartment complexes or high-rise apartments (19.64%), and a few row houses and other attached homes (9.35%).
New Orleans has seen an explosion in short-term rentals in recent years. Before restrictions were passed in 2019, there were an estimated 8,5000 units in operation. In 2021, AirDNA reported that just 6,537 rentals were active, averaging a daily rate of $199 and monthly revenue of $2,565.
The local government decided to ease restrictions in 2022, and allow more small multi-family buildings in urban areas previously banned. To find out exactly what kind of STRs are allowed, and where, view this zoning district guide.
Things are really looking up for short-term rental investors in this city. This year, New Orleans ranked 3rd best U.S. city to invest in STRs according to BeyondPricing. They report that year-end occupancy rose by 51% in 2021, leading to a 56% jump in RevPAR.
In a study of their guest community in New Orleans, Airbnb found that majority of their users visit the city in small groups. Many of them prefer short-term rentals to hotels for a “more localized and accommodating” experience.
AirDNA reports that short-term rentals on Airbnb and Vrbo average 67% occupancy, $237 daily rate, and $3553 in monthly revenue.
But aside from tourists and business travelers, New Orleans’ STR market also caters to government contractors and military personnel. There are large government installations in the city, including the Navy’s SPAWAR Systems Command, the Naval Air Station Joint Reserve Base, the Marine Force Reserves Headquarters in nearby Algiers, and NASA’s rocket manufacturing facility run by Lockheed Martin.
And let’s not forget that the city is a major port, a commercial and economic hub for the Gulf Coast. The Port of New Orleans is the 5th largest in the United States based on cargo volume. The Port of South Louisiana, also located in the NOLA area, is the world’s busiest in terms of bulk tonnage.
Many shipping, logistics, freight forwarding, commodity brokerage, shipbuilding, oil, and gas firms are based in Metro New Orleans.
If you’re interested in renting out multiple properties, you can look into corporate leases. Often, large corporations rent homes for small offsite meetings, product launches, even housing for new hires. Offer the type of property they’re looking for, and you may be able to fetch a higher rent.
If you decide to invest in furnished short-term rentals in New Orleans, get the help of expert vacation property managers. Cohostit provides turnkey management services – from marketing to revenue optimization to issue resolution – and everything in between. Click here to see if you qualify.
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