To avoid blundering through lack of planning, savvy real estate investors pick an investment model and then search for properties in New Orleans to match it.
How New Orleans Investors Can Avoid Some Common Traps
While investing in New Orleans real estate can be a very smart financial move, there are some common mistakes that you should avoid if at all possible:
Not Doing Your Homework
While impulse buying is a way of life for some people, successful real estate investors do their homework. Long before they put in an offer, serious investors conduct research on the property they are considering, do the math, consider the risks involved, consider whether they can survive an investment gone bad, and go into every deal with their eyes wide open. Most experienced real estate investors use OPM — other people’s money — to reduce their own financial exposure, and if they don’t see at least a 15 percent return on their investment, they will pass on the deal.
Paying Too Much for a NOLA Property
Searching for property in New Orleans is time-consuming, and when a property comes along that checks off most or all of the boxes, some investors make the mistake of overbidding for it. By doing so, they end up overextending themselves and taking on too much debt, which often extends the time it will take them to recoup their investment. To avoid this issue, before you buy you should consult with a knowledgeable New Orleans Realtor to find out what similar properties in the area have sold for in recent months. Unless a property has some unique characteristics that will appreciate over time, all bids should be consistent to property values throughout the neighborhood.
Underestimating Expenses
There is much more to owning a property than just making the mortgage payment. Expenses such as painting, landscaping, making repairs, fixing structural problems, insurance, and property taxes can add hundreds of dollars to what was thought to be an affordable property. Best practice: Make a list of all the monthly costs associated with a property before making a bid on it, and once you look at the numbers, you’ll have a much clearer idea about whether it would be a good investment.
Failing to Tap Available Resources
Real estate investors should be prepared to take advantage of all the resources available to them and get advice from real estate experts familiar with investment property in New Orleans, where properties in the French Quarter and the Warehouse District are being purchased and transformed into thriving historical neighborhoods that stand out above all others.
Moving Forward Without a Plan
New real estate investors often make the fatal mistake of buying a property simply because it seems like a good deal and then attempting to decide what to do with it, as opposed to making a plan and finding a property that fits the bill. Professional investors pick an investment model and then search for properties to match it, and not the other way around. They look at real estate as an investment strategy, not a single transaction, and make offers on multiple properties, buying the one that falls within their numbers and meets their expectations.
If you’re considering investing in New Orleans, our team of Realtors can help you weigh your options and guide you through a smooth property transaction. Learn more about choosing Satsuma Realtors for your real estate investment needs, or contact us to speak with a licensed agent.