New Orleans Short-term Rentals: Is it a Good Time to Start an Airbnb Now?
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 be positive years for New Orleans short-term rentals.
City of New Orleans Tourism
New Orleans has always been a top tourist destination. The New York Times named it the best city to visit in 2018, saying 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, entertainment, people, art, history and architecture. And its non-stop party vibe – live music from jazz to blues to rock ‘n roll – makes it an all-year crowd-drawer, no matter the season.
The city made it to several of US News’ top rankings:
- #1 in Best Cheap Spring Break Destinations
- #1 in Best Places to Visit in February
- #2 in Best Foodie Cities in the U.S.
- #3 in Best Nightlife Cities in the U.S.
- #5 in Best Weekend Getaways
New Orleans’ economy simply thrives on tourism, food, entertainment, and hospitality. In 2019, it broke records as 19 million tourists poured $10 billion into its economy.
Sadly, the city experienced huge setbacks in 2021. Hurricane Ida, surging Covid cases, and a decision by the local government to call off carnivals and limit public gatherings all hit a massive 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 that year became a Covid super-spreader event. The city became a Southern hotspot for the pandemic and was the first city in the South to impose the strictest pandemic measures.
Is it safe to travel to New Orleans right now during Covid?
Since then, the local government has taken pains to promote 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, for some time now.
Certainly, the shows must go on — all major events are pushing through in 2022. And after seeing fewer and fewer Covid-19 cases last February, the local government eased restrictions and lifted indoor mask requirements last March 3rd. If Covid transmission and hospitalizations remain low, it said vaccine or negative test requirements would also be lifted later in the month.
To see NOLA’s current pandemic-related guidelines, click here.
Does New Orleans allow Airbnb?
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.
You’ll find detailed information on short-term rental laws and regulations on the City’s Short-term Rentals page. You may also download and study the NOLA handbook on short-term rentals to find out specific registration requirements, licensing rules, code and zoning restrictions, and other pertinent ordinances.
New Orleans Real Estate Market Forecast
There are 71 neighborhoods in New Orleans. According to Realtor.com, real estate in the city right now is a buyer’s market – which means that the supply is greater than demand for homes.
As of January 2022, the median listing home price was $359.9K, trending up 12.8% year-over-year. (Redfin places the price increase at 19.3%.) The median listing home price per square foot was $231.
The forecast for the NOLA’s 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 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 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, New Orleans 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%).
Furnished Short-term Rentals New Orleans
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. But according to AirDNA data of 2021, there are just about 6,537 active rentals now with a daily average rate of $199 and monthly revenue of $2,565.
In 2015, Airbnb reported that the majority of their guests traveled in small groups and stayed in small properties. It said guests prefer short-term rentals to hotels for a “more localized and accommodating” experience.
The annual earnings for a typical host then was $10,900.
But aside from tourists and business travelers, the 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 don’t 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. Large corporations often rent homes for small offsite meetings, product launches, even housing for new hires. If you can offer the type of property they’re looking for, you may be able to fetch a higher rent.
Allow us to help you start and grow a vacation rental in New Orleans. Cohostit provides turnkey management services – from marketing to optimization to issue resolution – and everything in between. Click here to see if you qualify.