The idea of making money with New Orleans real estate isn’t a new one. There are many ways to invest and be successful. But no matter how you choose to invest, there are some things you need to know before investing in New Orleans.
Not everyone who invests in real estate is successful. You must constantly educate yourself to be successful with real estate investing. It’s like having a new career – learn as much as possible, and you will have an “edge” on those who are barely getting their feet wet.
Know What You Can Really Afford
Some of you may not use traditional bank financing, but you can still use some of the same formulas that lenders do in order to determine the affordability of a home for yourself.
To compare your debts per month versus how much you’re bringing in, a lender will look at your “debt-to-income ratio.” Let’s say you make $6000 per month and your expenses are $2200 per month. Your debt/income would be .36 or 36%.
Then, lenders observe front and back-end ratios to go even further. The front-end ratio states that your total housing payment (mortgage, taxes, interest, and insurance) should not be more than 28% of your total income. The back-end ratio examines your debts for things such as car payments, student loans, and your housing payment. Lenders like this number to be less than 36% of your monthly income.
Consider these, then observe all the other factors in your life. Do you love shopping or dining out? How drastic of a lifestyle change you are willing to make to reach your investment goals? Don’t over-extend yourself and be aware of your limits when buying real estate in New Orleans.
Know Your Long And Short Term Goals
Consider the ultimate goal for an investment. Do you want a quick flip for a fast profit, or do you want to buy and hold, with the possibility of higher appreciation over time? Knowing the answers will help you determine which property to buy. Every piece of real estate performs differently.
There are other factors that should influence the type of property you purchase. How do you visualize your future? Is there a large family? A return to school? Do you want to travel the world? Your answers to these questions will help you decide on a hands-on or hands-off investment.
Know Your Exit Strategy
At some point, you will likely sell the property, perhaps to go after another investment opportunity. What factors will help you determine when the time is right to sell? Will the house appreciate to a certain value? Will the returns peak at a certain point? Set some limits, have an exit strategy, and know when to walk away from a a bad investment to ensure you don’t get stuck with it.
Know As Many People As Possible
Networking should be one of your main objectives when it comes to success in real estate investing. Finding the best properties before other investors and being able to gauge market conditions are two of the greatest assets when buying New Orleans properties. Knowing the right people and working with companies such as Louisiana Direct Home Buyers, can help you be at the forefront of the local real estate market.
Ready to invest in New Orleans? We can help with things to know before investing! Send us a message or give us a call today! (504) 224-9066